February 8, 2018
As you may have heard, the markets declined 1,100 points on Monday (2/6) after a 350 decline on Friday (2/2). The market has been gyrating this morning, but is up as I write this.
The market is responding to a couple signals:
- Jobs: A considerable number of new jobs were created last month, which is a good barometer for our economy, however strong job growth can lead to higher inflation.
- Inflation: After near zero inflation for the past 7 years, we are seeing beginning signs of inflation. Inflation is one of the biggest concerns of the stock market, so even small signs of inflation cause concern (and in some cases an overreaction) with our stock market.
- History: Our markets have experienced historically low fluctuations for the past 32 months. Our current volatility is slightly above normal, but is reflective of pent up volatility
What this means:
- Stocks: Your stock positions may have declined value
- Bonds: Through most of the volatility the past 72 hours, bonds have risen in value. They have not risen as much as the stock market has fallen, however, so your account is probably lower in value than last week.
- Diversification: These markets are great reminders of why we typically don't invest all our monies in the stock market. Bonds, Stocks, Blue Chip stocks, Utilities, Real Estate are one of the ways we strive to minimize volatility of your investments
- Blue Chip Stocks: A bias towards blue chip stocks would likely have provided some preservation as many blue-chip stocks are down less than the overall market
What you should do:
- Patience: As Warren Buffet reminds us, investing requires patience both in good markets and bad ones. We will get through this.
- Breakfast: If you were unable to join us for our Investor Breakfast on Saturday, you can see a video replay on Facebook. We will have a separate version on YouTube in a couple days.
- We have been through these kinds of markets before, and we will get through this one. If you have additional concerns or questions, please call us.
For Market Outlook and upcoming events, check out our social media sites:
Website: http://WoodFinancialGrp.com (also for account access)
If you have questions or concerns, please call us at 208.343.2001 or send an email to Kelly.firstname.lastname@example.org
Diversification does not ensure a profit or guarantee against a loss. Opinions expressed in the article are those of the author and are not necessarily those of Raymond James. Expressions of opinion are as of this date and are subject to change without notice. The information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete. There is no assurance any of the trends mentioned will continue or forecasts will occur. Investing involves risk and investors may incur a profit or a loss. Past performance may not be indicative of future results.