Market Volatility Update
The stock market has been volatile the last 3 weeks in response to news of a slowing economy in China as well as anticipation of interest rate changes here at home. Good news, bad news, opportunity, and uncertainty always weigh on the market periodically causing abrupt short term losses and gains like we’re experiencing right now. We usually discuss this quite a bit when setting an investment strategy, so recent market activity may not be a huge surprise to most of my clients . Volatility is normal but not very comfortable.
I would like to share the charts below once again as a reminder of how volatile the market can be in the short term, how it smooths out over longer periods of time, and the patterns of recovery. The final chart is a reminder that selling during a market down turn is rarely successful because the market rebound often happens quickly and unexpectedly. If you miss it your returns are greatly diminished.
If you have accumulated excess cash waiting to invest this could be an opportunity to start dollar cost averaging into your investment plan.