As you know, the stock and bond markets have been experiencing significant volatility for the last several months.
What is behind this, and what should you do?
The supposed causes of this volatility are rising interest rates, trade issues, slowing economies overseas, issues with the Trump administration, and inflation concerns. We are sure there are other factors also influencing market behavior such as computer trading.
When short term investors become nervous, markets become volatile. Sometimes short term investors brush off concerns, and other times they react to every issue, which causes the daily market swings.
Markets eventually settle down and start moving based on actual business conditions which we feel are still very good.
At this point, we feel your portfolios are positioned appropriately, and no action is necessary. It doesn’t seem to make sense to chase this volatility, and react to all of this emotional and computer program trading.
We feel this volatility is a bit irrational, and that the diversification and quality of your portfolios will eventually prevail.
Please let us know if you have questions or comments. Thank you for the trust you place in us.