Stocks have violently declined and risen in recent days amid investor concerns about possible higher inflation and rising interest rates. Market returns have been very strong for a long time and for good reason. Our economy is improving, inching upwards and the global economy is improving as well.
Given the extremely low interest rates over the past several years, the market must now assimilate the new “norm” of rising rates. Also important to note, Central banks around the world have been priming the pumps as well to bolster the recovery from the 2008-09 global financial crisis and this too, has led to a very strong backdrop supporting equity prices.
We were long overdue for a market correction (as noted in our Blog posted on (Jan 19th). Yes, volatility has moved into “hyper-drive” over the past few days (having dropped 10% on Tuesday and remains off 7% as of this writing) and could continue for the near term. As we have stated on many occasions, a “pullback” in the market is a good thing from time to time and tends to improve the market’s overall health. Of course, we all realize “nothing goes up forever”
The end takeaway is “this correction will present some great buying opportunities on equities that had become so pricey and over-valued”.
We urge all to remain focused on the long term and at this juncture, we do not believe the long term “Bull” market that began in 2009 is over at this time but remain ever vigilante should this outlook change.