Is Volatility the New Normal?
We believe we are all experiencing a “new normal” which comes in the form of volatility. We have come to realize that volatility is here to stay. Rather than dwelling on this fact, we are taking steps to help protect against it. In fact, we have found that volatility, while it can make some uneasy, can also bring opportunities. We are working to protect against volatility by talking to mutual fund managers on a regular basis to see how they feel the latest news, world events, and economic indicators could affect the market. We are focusing on buying quality stocks and other investment products with an emphasis on seeking yield. We have our client accounts invested more conservatively than their original risk level, but are not getting out of the market. We feel it is important to make conservative moves to help protect against market loss, but also keep our clients positioned to potentially benefit from market gains as well.
As we have been saying for weeks now, we recognize that there are still many key indicators that have the potential to affect the market both up and down. We will continue to monitor these and make moves to best protect or benefit from them. We are moving away from highly correlated asset classes in the attempt to reduce volatility. We continue to focus on income producing areas to add potential benefit in what we feel is a flat market. We are also exploring new opportunities through various alternative investments.
We believe the market will continue to trade in a range which will go both up and down, but we do not foresee a large market plummet at this point. We do believe this volatility will stay throughout the summer with the year ending with the market being sideways with an upward tilt.
One this is for sure, we are no longer in the buy and hold market of the past. Times are changing and markets are volatile. What is your financial advisor doing during these times? If you hear them say the words “buy and hold” it may be time to get a second opinion.
As a constant promise to our clients and readers, we will continue to monitor the markets and the key indicators and communicate with you when changes need to be made. We will continue to manage your risk and best position you for gains. We will continue to review your accounts regularly. All we ask of you is that you communicate with us how you are feeling. If you are uneasy or nervous about this market give us a call. We are here for you!
There is no assurance that the techniques discussed will be suitable for all investors or will yield positive outcomes. The purchase of certain securities may be required to effect some of the strategies. Investing involves risk including possible loss of principal.
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which investment(s) may be appropriate for you, consult your financial advisor prior to investing. All performance references is historical and is no guarantee of future results. All indicies are unmanaged and may not be invested into directly.