"It's what you learn after you know it all that counts"

 "Never mistake activity for achievement"

-- John Wooden (1910 - 2010)

 

After a rapid and near constant ascent of 14 months, the market finally experienced a meaningful downward move over the last six weeks, with the S&P 500 dropping about 14% between late April and early June.  The most commonly cited causes are continuing fear over sovereign debt levels, the uncertain impact this may have on the nascent economic recovery, and the impact of the Gulf oil spill.  The energy sector, after financials and materials, was the third-worst performing S&P sector during that period.

Within the context of a well-constructed investment plan, such downturns highlight the need for diversification and offer an opportunity for re-balancing into under-performing asset classes.  They should have little to no impact on longer-term investment decisions.