Published by Taylor Financial Group
There’s no denying that we’ve had our fair share of volatility lately. In fact, the last time we saw this much volatility was during the financial crisis. But we expected some volatility for 2018, especially since 2017 proved to be one of the least volatile markets since the mid-60s. It was bound to happen after 110 months of a bull market. That inevitability, combined with all the political drama so far this year, has created a little more volatility than predicted. The good news is that we anticipate a strong earnings season and, therefore, despite all the drama, investors have reason to be optimistic.
Strong Earnings Season
Earnings season kicked off last week and, given the consistent growth in the S&P 500 Index, most economists expect another strong quarter. There are several reasons why folks are expecting a boost this quarter, including the robust U.S. manufacturing activity, strong global economic growth, and the new tax law. In fact, LPL Research expects that companies will begin to announce their plans regarding how they will use their tax law proceeds. Investors will likely begin to focus their attention on strong company fundamentals and corporate profits over trade headlines, which should also help stabilize stocks. Ultimately, we should all expect some more volatility, since the forecast is of earnings growth of 15% year over year.
Stay Committed to Your Plan
We know volatility can be intimidating. It could cause you to question whether you should switch up your investment strategy or revise your portfolio. And, don’t get me wrong, sometimes volatility can present some opportunities for investors. But one of the most effective ways to deal with volatility is to stay the course. Don’t let yourself become anxious. Moving money around out of fear or chasing stocks for better performance could ultimately take you off track and hinder you from pursuing your long-term goals.
If you’re feeling anxious about the markets or have questions about your portfolio, give us a call. We are happy to answer your questions and help ease your fears.
CNBC, Stocks Haven’t Seen This Much Volatility Since the Financial Crisis, April 11, 2018
LPL Financial Research, As Earnings Season Kicks Off, Should Investors Be Excited, April 9, 2018
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The views stated in this letter are not necessarily the opinion of Cetera Advisor Networks LLC and should not be construed directly or indirectly as an offer to buy or sell any securities mentioned herein. Due to volatility within the markets mentioned, opinions are subject to change with or without notice. Information is based on sources believed to be reliable; however, their accuracy or completeness cannot be guaranteed. Past performance does not guarantee future results. Investors cannot invest directly in indexes. The performance of any index is not indicative of the performance of any investment and does not take into account the effects of inflation and the fees and expenses associated with investing.