Financial markets were recently shaken as Silicon Valley Bank (SVB) failed on March 10th and they continue to be significantly volatile as investors are wondering what’s next.
SVB’s unique customers and internal mismanagement lead to their failure. The Federal Deposit Insurance Corporation (FDIC) stepped in to make every SVB customer whole immediately, even those who had more money than the traditional insurance limits. The Federal Reserve is providing additional short-term lending to banks. We have even seen a group of America’s largest banks, like JPMorgan Chase and Bank of America, step in to provide $30 billion of their own funds to banks that are under pressure. These actions lead us to believe America’s financial system will continue to operate normally and despite what news headlines may say, the risk of a widespread crisis is greatly reduced.
We continue to expect market volatility throughout the middle of 2023. As investors, we can never anticipate exactly when and how a distinct event like this will affect the market. However, we can choose not to fall into the panic that may seem overwhelming. Your portfolio is comprised of high-quality, diversified investments. Almost a century of American history shows us that long-term investors in the market are rewarded. Additionally, every Certificate of Deposit we offer is FDIC-insured. Please reach out with any questions or concerns. Thank you for your business and confidence.