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S&P 500 Returns Best Month Since 2020!

The first 6 months of 2022 were historically brutal for the stock market.

The bloodbath that occurred in the stock market from January – June saw the S&P 500 have its WORST first half of a year since 1970!

Going into the second half of 2022, one would likely expect investors would be in for more pain as the Federal Reserve continued its committed aggressive rate hiking plan (Fed increased rates 0.75 percentage points in the latest July meeting) to help bring down current high inflation levels.

For at least the first month (July) in the second half of the year, that expectation many had was the exact opposite of what eventually happened!

The S&P 500 closed July with its best performing month (+9.1%) since 2020

While it’s nice to see the bounce back in your 401k, IRA, kids 529 plans, and/or taxable brokerage accounts, the reality is nobody knows if the market has truly turned a corner into a new bull market or if we’re still in for rough waters ahead.

Inflation is still high, the housing market is still rough for 1st-time homebuyers (although it appears to be cooling slightly), and hiring freezes/layoffs are beginning to mount (especially in the technology sector).

It would be nice if there was a magic horn that went off that signaled both:

  1. “We’re going into a recession! Stop buying stocks and wait until the market bottoms (which will tell you when that happens)”
  2. “The stock market has bottomed and we're leaving a recession, buy now!”

But it doesn’t work that way in investing in the stock market.

All you can really do to give yourself the best chance at capturing your fair share of market returns is continue to dollar cost average into the stock market on a routine basis (e.g. weekly, bi-weekly, monthly), regardless if the market is up or down.

If you don’t believe me that dollar cost averaging over time works, well let me show you how I and my wife’s portfolio faired in July. As a result of continued investment into our 401ks, Roth IRAs, and taxable brokerage account every single week for 7 years now, our portfolio grew by over $38,000 in just this past month alone!

To put that monthly gain in perspective, my entire 1st-year entry-level salary out of college (2014) was $35,000.

As great as it was to see a good month again to help reinforce our long-term buy and hold strategy, even I have to remember the reality that monthly swings are nothing to get too excited or too depressed about.

After all, even with the S&P 500 returning 9.1% in July, it is still DOWN 13.9% (down 12.6% with reinvested dividends) in 2022!

All I can continue to do is:

  • Focus on continuing to make more money (from 9-5 and my business)
  • Invest every week into our taxable brokerage & every 2 weeks into our 401ks from our paychecks
  • Ignore the negative news headlines at the moment, and remember the stock market has (on average) returned 10.5% annually since 1957

Give yourself a pat on the back if you’ve been able to do the same so far in 2022. Outside of July, it’s been a brutal year in the stock market.

The patient long-term buy-and-hold investor (who’s able to tune out the negative news) always wins in the end.

7 comments

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king3178@yahoo.com

Thanks for the outlook. Definitely helpful in this market!

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The Wealth DadCreator

My pleasure, glad to hear you enjoyed it!

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hungha3111@gmail.com

Thank you for sharing your story. You are my inspiration

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The Wealth DadCreator

Absolutely, my pleasure!

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koko

i wanna buy ur book but i don't have credit card, do you use Paypal?

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The Wealth DadCreator

I haven't linked my PayPal account to Gumroad to allow that yet. You can also use Debit card if you want to buy!

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koko

i don't have one either haha, but I can send you money through Paypal if you give me your email

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