Below is a summary of a market update that we sent to our clients today. The linked pdf provides the full update if you would like to read more.View PDF
Market Update Summary
• U.S. Large Cap Stocks have experienced a correction (drop of over 10%)
• Other major global indexes are approaching bear market territory including Small US Companies
• The uncertainty around global trade, rising interest rates, slowing global growth and a potential inverted yield curve, have investors nervous and are leading to large daily swings in prices
• End of year tax loss harvesting is also contributing to more sellers than buyers
• The large price swings that we have had over the past 6 weeks are not uncommon in comparison with historical returns
• 2017 was an abnormally calm year in equity markets
• Intra-year declines of over 10% are very common in equity markets historically
• The bull market and economic expansion that began in 2009 is the 2nd longest in history and could end at any time
• Strong market returns are common immediately following a recession and we recommend that you stay invested through a downturn
Steps we are taking to benefit our clients during the correction
• Harvesting tax losses in taxable accounts
• Rebalancing from bonds to stocks to take advantage of the relative outperformance of bonds over the past three months
• Evaluating current investments and making changes as necessary