In March of last year, when the markets had dropped over 30%, we analyzed the effect of pandemics on the markets over the past 100 years.  We found that the S&P 500 averaged 13.26% returns annually during the 4 previous pandemics and the following 3 year periods.  Immediately following these pandemics, there were varied outcomes, but the S&P 500 on average went up all 3 years following these events and actually outperformed by 3% per year on average its historical average returns of 10.25%.  At the time, we said that this too shall pass.  Our portfolio of mutual funds last year returned 31.46%.

 

What is first and foremost in most people’s lives currently is the price of everything going up, including food, gas, building materials and the price of houses.  This time, we analyzed the correlation between years of high inflation and the returns of the S&P 500 over the past 60 years.  We found that there were 10 years where inflation was over 6% and, correspondingly, the S&P 500 averaged returns of 3.08% in those 10 years.  It is great to make money in the market when the market is going up, but here at B.S.F.S. Advisors, we see this as an opportune period of time to invest.  Even though our strategy has returned 13% this year, we are keeping a watchful eye on inflation.  By selecting our investments based on their Longevity, Opportunity, Returns, Diversity and Stability, we keep our portfolio diversified across different industries so that not all the funds that we invest in grow during the same periods.  Currently, we have two funds that we see as very good opportunities.

Sincerely,
Samuel Schaeffer