Is the recent stock market volatility telling us its time to get out of the stock market and put our money under the mattress? Based on the information available to us today, we don't think so. While corrections are never fun, they do happen.
Some investments are overvalued and others are fairly valued. We acknowledge the fear gauges, especially VIX (a/k/a the volatility index) are flashing warning signs. However, we are not seeing any structural problems with the U.S. economy. In fact, earnings for many blue chips have been favorable. On October 15, the Federal Reserve's Beige Book summation was released and economic conditions across the country had no major surprises for investors. The 12 Federal Reserve Districts described the nation's economy as experiencing modest to moderate growth.
Pundits have mentioned Europe and China as the source of the volatility. The slowdown in Europe and anticipated slowdown in China is really not "new" news, and their problems have been well documented.
Bottom line, we are seeing a correction in the market. We understand your concerns and are watching the markets closely.
As always, we encourage you to call us any time. We have been through this type of market correction many times. We anticipate this correction will be no different.
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