The More Things Change…
August is over and we have moved into our new location! Stop by for a visit or make sure to check us out at the Open House on October 6, from 2pm to 6pm. As I write this summary, I still have a few boxes to unpack, but we are really excited about our new office and how it will allow us to better serve our clients.
Change is a struggle for most of us, but we realized that making the move was the right choice for the long term. The markets had a big change last month as well, and it wasn’t a good one. The S&P 500 was down over 6% in August, making it the worst performing month since May 2012 and our first official stock correction since 2011.1 Not all change is good.
Volatility is one of those necessary evils. The natural relationship between risk and reward is what makes the stock market such a great performing long term investment. We don’t make allocation moves based on fear, but focus on the fundamentals. The chart to the right shows the various spikes in volatility over the last couple years along with the headlines that surrounded the panic. This current volatility spike isn’t much different than the others in regards to the “reasoning”, but really just a difference in magnitude of the drawdown.
Looking at the fundamentals of the market and the economy, we still see positives. GDP for the second quarter was just revised up to 3.7% and PE Ratios for the S&P 500 are below the 15 year historical average. 2 Chinese economic slowdowns, Fed actions, European recessions, presidential elections all contribute to the movements of the market, but the intermediate and long term directions of the market continue to be rooted in the fundamentals.
The mood as we enter September is depressing, and this correction may take months to reconcile. However, we still have the attitude that America will survive, so if you have the investment time horizon and appetite for risk, you should look for opportunities in times when fear is in abundance.
2 JP Morgan Weekly Insights
Index information is used to represent market performance, but you cannot invest directly in an index. Past performance is not indicative of future results.
Advisory services provided through IPI Wealth Management, Inc. Securities offered through Investment Planners, Inc., member FINRA/SIPC.
The Volkers Group, LLC is not affiliated with Investment Planners, Inc. or IPI Wealth Management, Inc.
Investment Planners, Inc., IPI Wealth Management, Inc. and The Volkers Group, LLC do not provide tax advice.
The following social media links will take you away from our website. Please be aware that neither Investment Planners, Inc. or The Volkers Group, LLC are responsible for the content available on external websites.