That’s Enough To Make Anyone Nauseas
“The obvious fact about security prices to any student of the market is that they fluctuate.” –Philip Carret
Well thank you for the insight Captain Obvious! Let’s just take a look at this year to see how bumpy it can get.
Using the S&P 500 as the market proxy, it hit an all time high on the very first trading day of the year. Then it proceeded to fall 12% through early March. Then it rallied 11% through the end of March. This was followed by a 20% collapse through mid June. This remains the low point of the year and stocks rallied 17% through the middle of August. In the last month we’ve seen moves of -9%, +5% and down another 6%.
Whew….that’s enough to make anyone nauseas! It feels like we’ve been through 8 different market cycles in the first 9 months of the year.
I’m not sure how long the current market environment will last. Nobody does. I do know that things will get better. They always do. I also know that things can change on a dime and when they do the gains are substantial and quick. You can’t afford to be watching from the sidelines when this happens.
There is nothing you can do to control volatility…..but you can control how you react to it.
Paying attention to the market when it’s in a downtrend is not going to make your life as an investor any easier. It’s ok to zoom out and trust that markets always recover. Our portfolios are built to weather these storms and our robust rebalancing procedures will put us in the best possible position to prosper when the markets do in fact recover.