Markets Don't Move in a Straight Line

Elizabeth Brit… |
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January 2016

Market volatility makes all of us uncomfortable, but unfortunately it is part of the normal investing cycle. The S&P, Dow, and Nasdaq all had market corrections (a drop of 10% or more from recent market highs) last year. That volatility has continued into the new year as we had one of the worst opening weeks  in a decade for the U.S. markets. Remember, one day, week, month OR EVEN YEAR does not define an investing cycle.
 
Though often asked, we do not know what the short term brings - too many variables.
 

  • By many measures the U.S. economy is healthy – perhaps not roaringly robust – but healthy.  All numbers are subject to interpretation, but:
    • Growth has been steady. 
    • The unemployment rate is the lowest it has been in 7 years.

Some Insight
 
We believe the current state of the economy does not point to a recession or therefore a bear market.   Some criteria that could point to a bear market include:
 

  • Negative growth of the economy (NO) – The U.S. continues to grow above 2%.
  • Spike in commodity prices (NO) – Commodities have been falling over the last year and a half.
  • Aggressive Fed tightening (NO) – The Federal Reserve has been very cautious about raising interest rates.
  • Extreme stock valuations (NO) – Valuations, in general, are hovering around historical averages.

 
Your long term goals are our benchmark for success, not the S&P 500 or Dow Jones Industrial Average. We recommend staying invested and maintaining a broadly diversified and balanced portfolio.
We live in a global world and there are many forces at work that can derail investor confidence.  Try to filter out the media noise and stay true to your long-term investment approach. 
 
We are ALWAYS available to discuss your concerns, answer questions or review your portfolio.  Never hesitate to contact us. 
 
Thank you,
The CFS Group

Disclosure:  securities and advisory services offered through Cetera Advisors LLC, Member FINRA / SIPC.  CFS is independent of Cetera Advisors LLC.  Investors cannot directly invest in indices.  Past Performance does not guarantee future results.