Stick to the Plan

In case you missed it, U.S. stock markets are having a tough start to Fall.

Since the beginning of October, the S&P 500 has shed about 7%, with losses picking up this week. The sell-off is being led by technology stocks and those tied to heavy industry, especially housing. 

Typical short-term panic is filling the airwaves. Was the stock market in a bubble? Has the Federal Reserve hiked rates too far too fast? Did President Trump’s trade wars finally take a toll? Is the rout spreading from emerging markets? Is a recession on the horizon?

Cliches are old and boring. However, sometimes reassuring. Markets go up and markets go down. The thing to remember is since the inception of the market, every downturn has ended in an upturn and that’s what we try to remind ourselves in times of stress. The only way you lose money is if you pull your money out of the market after it’s gone down. So what’s the way to invest? Stick with it for the long-term and don’t be driven by fear. We know you’ll thank yourself later.

When the sheep start following each other to sell, and the doomsday Media whip things into a frenzy, go back to basics. Economic fundamentals are strong and earnings look to hold up this Quarter. Interest rates are up, but there is still no better place to make decent returns than the U.S. stock market. We are looking at our sector mix and if these get silly, will be re-balancing to take advantage of market discrepancies always created by emotional sell-offs.