It’s definitely been a see-saw ride on Wall Street the last few weeks. Up 500, down 700, wow. It can be very upsetting and confusing, to say the least.
After today’s big decline, I know you are expecting me to write something comforting, and I am sorry to confess that I’m doing exactly that. I want you to know that the recent behavior, as crazy as it may seem, is really quite normal. What was abnormal was last year’s stock market of 12 consecutive months of increase, without a single down month. I don’t know how often that has occurred in the past, but I can tell you it hasn’t been often.
Lately, there has been a lot of rather big news coming out seemingly on a daily basis. Interest rates are rising. Wait, maybe they’ve stopped. Trump is slapping tariffs on aluminum and steel. Trump is hitting China with $50 billion in tariffs. Well, maybe they’re just negotiating ploys. China hits back with $50 billion of their own tariffs on our agricultural products. It’ll be chaos in the Midwest for sure. Well, maybe not. Day after crazy day of this stuff has been coming our way.
The news du jour is Trump might hit China again with another $100 billion of tariffs., plus the new jobs numbers this month were about half of what was expected. This president likes to play high stakes chicken, and some are delighted, while others are horrified. Name your poison.
Through this all, the markets have been reacting exactly as they should. Whenever new and unsettling information comes out, the markets logically decline. Whenever things settle down, they go back up. That’s what they are supposed to do. It’s all quite rational, however there is always the tendency for people to be a little more emotional and melodramatic on days like this, so the markets can be even more volatile than they otherwise will be. I’m actually kind of surprised the markets haven’t been even more volatile.
There’s nothing going on in the big picture that makes us want to sell our stocks. This too shall pass, just like every other time in the past. Fundamentally, the economy is still in good shape, interest rates are low, and things are still humming. Most importantly, corporate profits still look to be making strong gains.
We are using these down days as opportunities to look for bargains for you, just like we always do. If you need to speak to us, about the markets or your accounts, please let us know. We’re here for you, and absolutely do not want you suffering needlessly because of the macroeconomic shenanigans going on.
Have a great weekend, and try not to worry.
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