Market Bulletin: The Current Market Pullback (Audio Included)

DEAR CLIENTS:

You’ve probably been asking yourself lately, “What is going on with the stock market?” Despite a strong economy that has the lowest unemployment in decades, a strong dollar and GDP, and inflation that remains modest, the stock market has been enough of a roller coaster this year to have plenty of investors feeling queasy. Markets tend to not celebrate the current so much as look out into the future and are typically a leading economic indicator.

Years ago, I introduced the concept of the audio email to our office. Whenever markets were experiencing sharp declines or wild volatility, Brent & I would talk, sometimes for hours, examining the current issues that were causing those fluctuations. Then, Brent would spend time writing & recording a message to you. Well, lately, it seems like old times with the market moving sharply down one day, and then up the next, so now seems like a good time to speak with you about the issues contributing to the current situation.

Looking back, 2017 and most of the last decade, spoiled us by delivering very robust returns with almost no volatility. Markets typically experience a 10% pullback at least once a year. Last year, we not only didn’t experience a 10% correction, we didn’t even have a 5% decline. This year, we’ve seen volatility return with the markets zigging & zagging all year giving us the sawtooth pattern that you’ll see in the chart of the Dow Jones that we’ve included in the text of this email. The net effect for most investors has been a flat or slightly down year. If you’re feeling like you’ve lost ground this year, I’ve also included charts to show you the last 5 and 10 years, which really put into perspective how far we’ve come, with very little volatility along the way.