A week ago the Dow was over 17,500. By Thursday it closed under 17,000. Friday saw it drop below 16,500 and yesterday closed below 16,000. It is pretty clear than soon we will be in calamity and ruin… right?
But wait. Suddenly markets are up quite a bit today. Not enough to regain the losses of the last week but the markets are heading up.
What the heck is happening? Is it time to panic or not?
We do not have any special crystal ball so in times like these it is important to look at the bigger picture. The economy is growing. Earnings are solid. Yet the market has been a roar since 2009. Typically the market corrects (a decline of 10% or more) about every 18 months. That hasn’t happened for years. We were overdue.
This volatile decline is technical in nature, not fundamental, and is being fueled by fear and uncertainty. The problem with 24 hour news is that they have to find things to talk about 24 hours a day. Sometimes that means issues which are not that important are expanded to fill the available time.
Don’t buy into the fear. Stick with your plan. We have our eyes on both the markets and your targets. We will act when appropriate; not react out of reflex.
If you want to review your particular situation we are here for you. Give me a call, send an email, or set up a meeting. We are here to help you and make you comfortable with your money.