Articles
Rollercoaster ride?
08.13.2022
A short email about rollercoasters.
Markets rallied this week on some better-than-expected data about inflation. The July number came in at 8.5% year over year versus the June number of 9.1%.¹ It was a bright spot in what has seemed like a relentless parade of bad news.
The Dow, S&P 500, and Nasdaq have now seen four consecutive weeks of gains. The Nasdaq, has technically entered a new bull market, but opinions vary on whether this is the start of a new trend.
Have we seen the bottom of the bear market?
Maybe. Or maybe we’re somewhere in the middle with the loop-the-loops.
Let’s be prepared for volatility to continue.
Folks tend to focus a lot on the numbers, but emotions and behaviors may matter even more.
Knowing how to stick with a strategy during the loops and curves and uphills and downhills is a HUGE part of being a successful investor.
Market bottoms don’t come with a signpost. There’s no one waving a flag saying, “the worst is over, it’s all uphill from here!”
The end of a bear market looks an awful lot like the middle, and we don’t know if it’s the bottom until after we’re already past it.
That’s why it’s so important to stick to a strategy and not let the euphoria of a rally or the fear of drops sway our decisions.
Investors who bail during the downturns and miss the ride back up tend to lose spectacularly.
Why? Because the best days and worst market days have historically clustered.²
We don’t know how long this bear market will last.
We do know this: you can’t enjoy the upside of the rollercoaster if you get off at the bottom.
Bottom line: it’s nice to get a reprieve from the selling pressure, but let’s be (emotionally and financially) prepared for potentially more volatility ahead.
We’re keeping an eye on it and we’ll reach out as needed.