Roger Weller and I have known each other for about a couple of decades. For the past 10 or 15 years, I’ve been fortunate enough to have Roger as an advisor with JRSCM. He takes care of folks all up and down the Atlantic coast and has oodles of experience and knowledge of and about the business of planning and investing.
So, his comments are interesting and relevant to today’s market and drip of wisdom.
Hi everyone:
It’s been a while since we’ve discussed recent market activities with you, so we thought that you might like ourthoughts on the subject as recent markets have been so volatile lately. Remember our recent article on “Fear and Greed”? Yup, many investors get nervous and sell at market bottoms only to realize later that theyshould’ve been buying as markets generally go higher over time.
Old Fashioned Correction
The volatility you’ve been experiencing lately is really an old-fashioned correction. By definition, a correction is a 10% reduction to account balances after a solid increase was experienced in the markets.
Last summer, we had that increase that started in July and continued into the middle of August. A correction is a healthy situation as investors begin buying again once they realize that bargains are available.
Auto Strike
While its debatable as to whether a strike is good or bad, the economy can be affected by a decline in activity and Wall Street worries that such can disrupt the value of securities. The reduction in auto production will likely have a brief impact on investments, but long term our investments generally trend higher.
Potential Government Shut Down
Governmental legislative risk nearly always puts a drag on our portfolios, but once resolved, our markets heal rather quickly. Memories are most always short term, so selling should not be an option. Please don’t pay too much attention to the media as they just love to use a potential shut down to scare folks ….. just ignore them.
Interest Rate and Inflation Risks
Interest rates and inflation are like twins; one serves the other. The Fed just paused interest rates for the
second time since beginning their fight against inflation mainly because inflation has been slowing. So, despite their recent comments, the Fed is winning their war against inflation. But they still like to keep an oar in the water, so the mere thought of another interest rate increase caused the markets to drop again.
Summary
Please remember that the absolute worst time in the markets over the last 75 years has been the August –
October period, but the absolute best time has been the November – January period. Despite how you might feel about the markets today, the next few months should reflect much better performance
given the following:
- Companies have reported increasing sales and earnings all this year.
- People are still spending money on consumer goods.
- Interest rates have likely stabilized, which means inflation will be lower.
- All the above tends to cause markets to improve over time.
Thanks for trusting us with your business. It’s truly been an honor serving you.
~Roger Weller