As the song goes – momma said there’ll be days like this. I’m looking at the stock market ticker tape at the end of trading today and it is a fine hue of crimson. Some might observe that there’s blood running in the streets and comment that they saw it coming, which may or may not be true. But, days like this are always coming…..weeks like this, months like this are always coming.
I will be so bold as to be positive, stick my neck out there and predict in the future we will see the Dow Jones rebound and be back above 25,000 – heck above 26,000 – again. I won’t tell you when because I don’t know, but I will predict it will happen.
In the meantime, we might see the global stock markets continue to lose ground even in the face of good corporate earnings, low unemployment, relatively low interest rates, strong housing numbers, tax reform, etc., etc., etc. The markets can be fickle and move opposite good news – and if you can ignore the naysayers, there’s a lot of good news out there.
I enjoy looking at the chart above, particularly on days like today. It’s a great reminder that the stock market expands most of the time. Contractions, like we’ve seen over the past month are short lived, but rebounds and expansions typically last much longer. Are we in the beginning of a contraction? Perhaps. If we are, I bet it won’t last long comparatively. But, consider the possibility that we are still in the middle of an expansion and this is just another speed bump in the road.
So, what are investors and savers like you supposed to do? Same thing you always do, consider your ability to assume risk, remain diversified, add to your investments systematically (especially when asset prices are getting cheaper, like they are today), and don’t let your emotions cause you to stray from your long-term investment strategy.
If you need help thinking through your long-term goals, strategy, and needs in the wake of the recent market swoons, please know we are here to help. Contact us to set up an appointment – we’d love to talk to you.
Investing involves risk including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss. Past performance is no guarantee of future results. There is no guarantee that a diversified portfolio will outperform a non-diversified portfolio in any given market environment; it is a method used to help manage portfolio volatility. This material contains forward looking statements and projections. There are no guarantees that these results will be achieved. It is our goal to help investors by identifying changing market conditions; however, investors should be aware that no investment advisor can accurately predict all of the changes that may occur in the economy or the stock market.