CHART OF THE MONTH – AUGUST 2024

Date: August 2024

From: Investment Committee

Subject: Chart of the month

_________________________________________________________________________________________

Long-Term Perspective: Market Volatility is the Price of Admission for Investing

The stock market had a strong start this year. The S&P 500 gained over +15% in the first six months, its 16th strongest first-half return since 1931. The equity market’s rise continued into early July, and the index set a new all-time closing high on July 16th. However, the stock market experienced increased volatility as it traded lower over the past few weeks. The selloff accelerated in the first week of August after a report showed unemployment rose to 4.3% in July, a nearly 3-year high. The recent volatility has been a notable change from the first half’s steady climb, with the S&P 500 at one point -8% below its all-time high from mid-July.

History shows that stock market drawdowns are a natural part of investing. The chart below graphs the S&P 500’s price return each year since 1990. The navy line shows the index has produced an average annual return of nearly +10%, but the bottom half of the graph shows a lot can happen within the market throughout the year. The red dots show the S&P 500’s biggest intra-year decline in each year. Since 1990, 32 of 35 years have had an intra-year selloff of -5% or more. Nineteen years have had a selloff of -10% or more, with six years seeing a drawdown greater than -20%.

Stock market volatility is the price of admission for investing. In the short term, markets move in both directions as data changes and investors adjust to new information. In the long term, corporate earnings and economic growth influence the market. The recent market volatility appears inconsistent with recent earnings and economic data. With over 90% of companies reporting, S&P 500 earnings grew more than +10% year-over-year in the second quarter. Wall Street analysts expect an additional +10% earnings growth over the next 12 months. Unemployment is rising but remains low by historical standards. Consumer sentiment is improving as inflation eases, and retail spending continues to grow. The chart below puts the recent volatility into perspective, and the market’s quick bounce back is a timely reminder of why we invest with a long-term mindset.

Source: Market Desk

SEC Registration does not imply a certain level of skill or training.

The information provided herein is for general informational purposes only and is intended for your personal use and should not be circulated to any other person without our permission and any use, distribution, or duplication by anyone other than the recipient is prohibited. No portion of this commentary is to be construed as an offer or solicitation to buy or sell a security, or the rendering of personalized investment advice. The views and strategies described herein may not be suitable for all investors and are subject to investment risks. The content is developed from sources believed to be providing accurate information. The information contained herein should not be relied upon in isolation for the purpose of making any investment decision.

We believe the information contained in this material to be reliable and have sought to take reasonable care in its preparation and conducted reasonable due diligence to ensure the third parties’ performance is not materially inflated or incorrect; however, we do not represent or warrant its accuracy, reliability, or completeness, or accept any liability for any loss or damage (whether direct or indirect) arising out of the use of all or any part of this material. We do not make any representation or warranty regarding any computations, graphs, tables, diagrams, or commentary in this material which are provided for illustration/ reference purposes only. These views, opinions, estimates, and strategies expressed in it constitute our judgement based on current market conditions and are subject to change without notice. Any projected results and risks are based solely on hypothetical examples cited, and actual results and risks will vary depending on specific circumstances. Investors may get back less than they invested, and past performance is not a reliable indicator of future results.

Data which may be found in this document is based on our research and should not be taken as a forecast or an estimate of likely future returns. Any reference to a market index is included for illustrative purposes only, as an index is not a security in which an investment can be made.

Investments involve some sort of risk including potential loss of principal; diversification alone cannot guarantee against loss. Any projected results and risks are based solely on hypothetical examples depicted. Forward-looking statements should not be considered guarantees or predictions of future events. More complete information is available, including product profiles, which discuss risks, benefits, liquidity, and other matters of interest. The value of any investment may fluctuate as a result of market changes. Past performance is no guarantee of future results, and there can be no assurance the investment strategies discussed herein will prove profitable.

All opinions, estimates, investment strategies and views expressed in this document are subject to change without notice information. The recommendations made for your customized portfolio may differ from any asset allocation or strategies outlined in this document. Benchmark Financial does not guarantee the future performance of any portfolio, guarantee any specific level of performance, or guarantee any strategy or overall management will be successful or that the client’s investment objectives will be met.

Benchmark Financial is not a broker dealer and does not offer tax or legal advice. Please consult your tax or legal advisor for assistance regarding your individual situation. Investment Advisory Services offered through Benchmark Financial Wealth Advisors LLC, an SEC Registered Investment Advisor. Insurance services offered through Benchmark Financial Insurance Advisors LLC. The Benchmark Financial Wealth Advisors ADV Form 2A, 2B & Form CRS, which describe the services offered, fees charged and any conflicts of interest, are available upon request or online at www.bfllc.com. Additional information about Benchmark Financial and our advisors is also available online at https://adviserinfo.sec.gov/firm/summary/287966.