Market Thoughts - February 2018
Just wanted to drop you a quick note regarding the recent market volatility.
As we mentioned in our January 2018 report…the stock market has gotten a bit ahead of historical fair valuations, primarily due to the exuberance of the benefits of deregulation, tax reductions and now possible infrastructure spending. Additionally, money that has been sitting on the sidelines for years has recently begun to re-enter the Market, accelerating the valuations further. In January, markets were up about 7%.....for that to continue, it would mean a 75-85% market return in 2018….highly improbable.
Then, here comes a bump of too much good job news which made some fearful that the Federal Reserve would step in and accelerate interest rate increases. Boom….market tanks and gives back all of its year-to-date gains.
This type of correction from a period of broad based gains with little to no volatility is not only common but expected.
We are still comfortable with our 2018 Market forecast of 8-10% on Equities and 3-4% on Fixed Income.
Please call with any questions or concerns you may have.