Of course we’ve been watching the market volatility for
the last several days. As we write this
on Monday we don’t know when a market bottom will occur, but we are fairly
sanguine about what’s happening. Our
message: don’t worry, don’t panic and just hold the course.
We think it’s important to put things in perspective while
the stock market gyrations are headlining on most news outlets. It looks to us like this “correction” is long
overdue. While the stock market has been
largely “range bound” for about the past year, we’ve actually been in a six
year bull market since early 2009. Many of
us have forgotten that the market normally bounces up and down. We think this current drop will be ultimately
healthy for the market and in fact necessary for further upside opportunities.
There seems to be a consensus on what has triggered this
recent concern reflected in the market:
- While interest rates should probably be 1.5 to 2%, the Federal Reserve has held rates down close to zero, fueling at least part of the bull market
- The U.S. economy has been OK, but not great, for several years
- China’s economy is slowing
- This means sales by U.S. multinational companies (Apple, Exxon Mobil, Caterpillar) will fall
- China’s stock market collapse has reverberated around the globe, affecting markets everywhere
If we believe you should make changes we will of course
let you know. Should you want to discuss
any of this please don’t hesitate to call. In the meantime, we hope these words of
comfort are helpful and you will stay the course.
Securities
offered through American Portfolios Financial Services Inc., Member FINRA and
SIPC. Investment advisory services offered through Wealth Management Group, LLC
and also American Portfolios Advisors Inc., an SEC Registered Investment
Advisor. WMG, APA and American Portfolios Financial Services Inc. are
independently owned and operated.
