We’ve written that investors should not panic during market declines, or get complacent during market rallies. The market has rallied from its recent lows, and we have reason to believe that it will continue in the near term. There are several indications that this correction cycle is nearing it end. However, risks remain high, and we do not yet have an ‘all clear’. We will likely use any near-term rallies to reduce risk and/or sell underperforming investments.
We remind clients that they are not invested in economic data points such as GDP or CPI. Rather, they own dynamic profit-making companies which have grown consistently over time and weather difficult markets. Stock market declines like this are normal, though they can be emotionally trying. Remember, volatility is the emotional price that stock investors pay for higher returns over the long run.
