Return to Normal

Posted February 8, 2018

Since the financial crisis in 2009 the Dow Jones Industrial Average steadily rose from about 6,000 to over 26,000 in January of this year; it has declined nearly 10% in recent days. The Dow Jones Industrial Average gyrated wildly Tuesday, trading in a range of nearly 1,200 points, the blue-chip index changed direction 29 times over the course of the session before surging in the final hour to close up 567 points, or 2.3%.

Is it time to worry, sell your stock funds and move to cash? Actually what is happening now is part of a normally operating stock market. Historically a market correction, defined as a decrease of 10%+, happens about every year. The last correction was about two years ago, remember Brexit, and corrections have generally been quite infrequent since the last bear market in 2008. Many investors, especially those new to stock investing simply aren’t used to experiencing swings like those we have encountered in the past two weeks. But corrections are an inevitable part of stock ownership, and there’s nothing you can do as an individual investor to stop a correction from occurring, nor can you market time a correction. If you are concerned about your portfolio and this current market please feel free to give us a call to review your investments.

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