Welcome to our May 2026 Viewpoints, a monthly bulletin from PDS Planning to our valued clients and friends. Our goal with each issue of Viewpoints is to provide you with a wide variety of perspectives on life and wealth. Feel free to share with others.
Small Wins to Great Success
From 1928 through 2024, the stock market (S&P 500) had an average daily gain of just 0.03%. In fact, down days tended to be slightly worse than the up days.
These small gains really put into perspective how powerful compound growth is over time, and the importance of staying invested for as long as possible. It may seem counterintuitive, with an average daily gain of just 3 basis points and down days slightly worse than up days, yet those small, consistent gains accumulate into something remarkable: markets are up almost 80% of the time after 1 year and 93% over 5 years.
Inflation: Rising with Energy Costs
Inflation, inflation, inflation. We took a few months off showing this chart and writing about it because it was business as usual. The usual has changed, so we’re taking another look. Conversations between the US and Iran are still underway to find a peaceful solution to the current conflict. Oil is still not freely flowing through the Strait of Hormuz and oil prices and supply continue to reflect it. Energy costs have risen and are the main culprit for the increased inflation over the last two months (see the green category).
Inflation: Stocks, Bonds, or Cash
As inflation has picked up recently, so have the all-important allocation questions. With inflation eating into returns, how can a portfolio more reliably meet and exceed it?
For long-term investors, stocks and bonds are the consistent right answer. The ‘best’ is dependent on each investor, their risk tolerance and financial plan, but again, stocks and bonds have been the tried and true answer since the 1980s. Cash, while feeling safe in uncertain times, has historically been the weakest hedge against inflation with purchasing power quietly eroding over time. The discomfort of short-term volatility in stocks and bonds is often the price of staying ahead of inflation in the long run.
IMPORTANT DISCLOSURE INFORMATION: Please remember that past performance is no guarantee of future results. Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product (including the investments and/or investment strategies recommended or undertaken by PDS Planning, Inc. [“PDS”]), or any non-investment related content, made reference to directly or indirectly in this blog will be profitable, equal any corresponding indicated historical performance level(s), be suitable for your portfolio or individual situation, or prove successful. Due to various factors, including changing market conditions and/or applicable laws, the content may no longer be reflective of current opinions or positions. Moreover, you should not assume that any discussion or information contained in this blog serves as the receipt of, or as a substitute for, personalized investment advice from PDS. To the extent that a reader has any questions regarding the applicability of any specific issue discussed above to his/her individual situation, he/she is encouraged to consult with the professional advisor of his/her choosing. PDS is neither a law firm nor a certified public accounting firm and no portion of the blog content should be construed as legal or accounting advice. A copy of the PDS’ current written disclosure Brochure discussing our advisory services and fees is available for review upon request or at www.pdsplanning.com. Please Note: PDS does not make any representations or warranties as to the accuracy, timeliness, suitability, completeness, or relevance of any information prepared by any unaffiliated third party, whether linked to PDS’ web site or blog or incorporated herein, and takes no responsibility for any such content. All such information is provided solely for convenience purposes only and all users thereof should be guided accordingly. Please Remember: If you are a PDS client, please contact PDS, in writing, if there are any changes in your personal/financial situation or investment objectives for the purpose of reviewing/evaluating/revising our previous recommendations and/or services, or if you would like to impose, add, or to modify any reasonable restrictions to our investment advisory services. Unless, and until, you notify us, in writing, to the contrary, we shall continue to provide services as we do currently. Please Also Remember to advise us if you have not been receiving account statements (at least quarterly) from the account custodian.
