Stock markets closed a volatile March down 1-2%. Forecasters suggest that this year may hold more market volatility. Just when we became comfortable with the steady move forward last year. Right now the market seems to be checking out where prices should be. If prices drop 10% from their peak it is called a correction. The market has not corrected since early 2016. We still think that stocks will rise to a new high – that this bull market is taking a breather now and will climb higher before it ends.
On April 2 we saw an initial effect on our markets of a trade war with China. If we can avoid a global trade war, the markets may take a small hit, even less than a full correction. Time will tell how this scenario plays out, with the action changing the game daily. So far it seems to be making investors think twice about the current valuations of stocks. Our portfolios are prepared to handle this volatility.
Just when we let ourselves think this snowfall must be the last, we get one more. These spring snows are fertilizer gold for plants. Slow melt dissolves minerals in the soil for new roots to pick up gradually. Discouraging as this weather is, something is benefiting from it. The reward will bloom soon.