Broker Check

Market Volatility

| October 16, 2018
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Hello, I hope this finds you well.  Today is Tuesday, October 16, 2018 and in light of the recent market volatility, I would like to share some thoughts and perspective with you. 

I realize that volatility is painful, uncomfortable, and nerve-wracking, but it is important to remember that these bouts of volatility are a normal part of the investment cycle.  There are a few reasons we have seen volatility pick up recently: increasing interest rates, tensions between the U.S. and China, and nervousness about upcoming midterm elections.  The S&P 500 also had one of its least volatile third quarters in history – in fact, it was the first year since 1963 that the index’s third quarter did not have a singe 1% change (up or down). 

 

Pullbacks, though uncomfortable, are normal and healthy – even though stocks tend to average a 7-8% gain each year, they also tend to have three to four pullbacks which are  5-10% drops each year, and at least one 10-20% correction.  As I mentioned in my update video a couple of weeks ago, the U.S. economy is in excellent shape, and this is what we should be focused on.  So, take a deep breath, focus on the fundamentals, and as always if you have any questions, please feel free to reach out.  Thank you for taking the time to watch this and have great weekend!

 

IMPORTANT DISCLOSURES

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which investment(s) may be appropriate for you, consult your financial advisor prior to investing. All performance referenced is historical and is no guarantee of future results. All indexes are unmanaged and cannot be invested into directly.  All indicies are unmanaged and may not be invested into directly. 

 

This information is not intended to be a substitute for specific individualized tax advice.  We suggest that you discuss your specific tax issues with a qualified tax advisor. 

The economic forecasts set forth in the presentation may not develop as predicted and there can be no guarantee that strategies promoted will be successful.

Investing in stock includes numerous specific risks including: the fluctuation of dividend, loss of principal and potential illiquidity of the investment in a falling market.

Bonds are subject to market and interest rate risk if sold prior to maturity. Bond values will decline as interest rates rise and bonds are subject to availability and change in price.

Investing in foreign and emerging markets debt securities involves special additional risks. These risks include, but are not limited to, currency risk, geopolitical and regulatory risk, and risk associated with varying settlement standards.

Investing involves risk including loss of principal.

INDEX DESCRIPTIONS

The Standard & Poor’s 500 Index is a capitalization-weighted index of 500 stocks designed to measure performance of the broad domestic economy through changes in the aggregate market value of 500 stocks representing all major industries.

The Barclays Capital Aggregate Bond Index, which used to be called the "Lehman Aggregate Bond Index," is a broad base index, maintained by Barclays Capital, which took over the index business of the now defunct Lehman Brothers, and is often used to represent investment grade bonds being traded in United States.

The Dow Jones Industrial Average is comprised of 30 stocks that are major factors in their industries and widely held by individuals and institutional investors.

The MSCI EM (Emerging Markets) Index is a free float-adjusted market capitalization weighted index that is designed to measure the equity market performance of the emerging market countries of the Americas, Europe, the Middle East, Africa and Asia.

The MSCI EAFE Index is a free float-adjusted market capitalization index that is designed to measure the equity market performance of developed markets, excluding the US & Canada.

The Bloomberg Barclays U.S. Aggregate Bond Index is an index of the U.S. investment-grade fixed-rate bond market, including both government and corporate bonds.

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