November presented investors with a continuation of the equity market swings experienced in October. While the price fluctuations during the month seemed dramatic and perilous,we observed them as normal and expected.
We continue to remind you that, on average, markets correct by 10% -15%every year. The markets did not correct at all in 2017, but instead were positive every month in 2017: a feat that has never happened in the history of the S&P 500 Index. The latest market correction will be the second of its kind in 2018 (remember Jan/Feb?), further supporting the average of one 10%-15%market correction every year.
The increased market volatility elicits emotion, which is also normal and expected.Our caveman brains are hard wired to fall prey to both fear and euphoria, and so we’ve been receiving increased questions about our thoughts on the markets.Questions about trade wars, interest rates and slowing economic growth abound. We encourage you to read Erik Strid’s latest blog, Great Investors Ignore Possibilities, (part of Erik’s Great Investors Article Series) about “possibilities” for more insight on these questions.
We know times like these can be stressful, so we always try to let you know our current thinking…
We are not worried. We are not concerned. We are not scared. This is normal and expected market behavior. For our clients, we have planned for this so there is nothing “to do”.
Finally, some reminders:
- For those who are ‘savers’ (aka accumulation investors): While it may not feel like it, this is welcome news. As you continue to save, you are now able to buy things at a cheaper price.
- For those who are withdrawing from their portfolios: You shouldn’t be worried either. If you planned properly, you should have a plan that guides you through how to handle times like these. At Concentus, we design Wealth Policy Statements for clients specifically to be able to handle these types of markets. Remember, great investors work from a plan.
If you don’t have a plan, we can help. Just contact us at: HelpIDontHaveaPlan@concentuswealth.com