Banks and Markets

The news of the Silicon Valley Bank’s collapse and UBS’ acquisition of Credit Suisse for pennies on the dollar were shocking. These dual shockwaves reverberated through the banking system and left many investors wondering what fallout may follow. In response, the US Federal Reserve and international governments began taking various monetary actions, including providing additional liquidity, to shore up confidence for bank depositors. 

Global stock and bond Markets are doing what markets do when significant shocks to the system occur. Current prices are fluctuating, sometimes rapidly, in the process of working through recent news.

Times like this remind us that volatility is a normal course for markets. The chart below helps illustrate how global markets have endured banking crises and various disruptions throughout history. Over the long term, discipline and patience have been rewarded by ever-resilient markets:

*You cannot invest directly in an index. Past performance is not a guarantee of future performance.  Banking crisis info from: http://go.efficientadvisors.com/e/91522/wiki-List-of-banking-crises/92ytql/1861058348?h=3MnMchQbvzwjfHoohIGhB9Nh3_mOKkL1zCn7aVgwi0U.

Always remember that it is impossible to predict with 100% accuracy how people, businesses, governments, and the ultimate pricing mechanism, markets will react to news and new information.  One thing is clear, enduring short-term volatility is key to long-term success.

https://en.wikipedia.org/wiki/Collapse_of_Silicon_Valley_Bank#:~:text=On%20Friday%2C%20March%2010%2C%202023,2023%20United%20States%20bank%20failures.