In the midst of a shaky stock market which has gotten a lot of attention from those who invest in it and those – possibly like you – who have retirement savings in 401K’s, I have asked my financial planning son – Christopher L. White with Chris White Wealth Group, an Independent firm in Franklin, Tennessee to give us some perspective about what they see taking place in this stock market in the last few days. Here is what he published to his client base in the last 24 hours:

Market Volatility Spikes Amid Global Economic Concerns

Equity markets suffered their worst week since 2011 for the week ending August 21, with the Dow Jones Industrial Average down more than 1,000 points and the S&P 500 down 5.7%. Put into the context of the bull market of the past six years, a pullback can be seen as normal activity for a market that has moved steadily higher since the lows of March 2009. Until now U.S. equities have held their ground so far this year, despite various headwinds including declining oil prices and international concerns including those from China and Greece and uncertainty over when the Federal Reserve will begin to raise interest rates.

With the two major bear markets of the 2000s still top of mind, investors appear to have become more bubble-conscious, expecting those major crashes to be a regularly occurring pattern. Andrew Adams, chartered market technician on the Raymond James Investment Strategy team, reminded us in his Thursday morning commentary that history has shown what happened in 2008-2009 is rare. “Here we are, a short time later, about 200% above that 2009 bottom in the grand scheme of things. We are still confident that this run can go even higher for reasons we have frequently discussed over the last few years,” he noted.

In his Friday morning commentary Chief Investment Strategist Jeffrey Saut asked investors to recall that “once the markets enter a selling stampede, they tend to last 17 to 25 sessions, with only one to three rally attempts before they exhaust themselves on the downside. It just seems to be the rhythm of the thing in that it seems to take that long to get everyone bearish enough to throw in the towel and capitulate. Friday was session 24. So, yes, it does feel like capitulation and participants are scared.”

Investors’ anxiety levels continue to be compounded by uncertainty about what Federal Reserve inflation concerns mean for interest rates. Chief Economist Scott Brown shared that July’s monetary policy meeting showed a range of Fed officials’ opinions, with some perceiving a good amount of job market improvement while others not convinced inflation would move back to the 2% goal both signs of potential rising rates.

“Although global developments and downward pressure on commodity prices ought to lead the Fed to delay its initial rate increase beyond September, officials are still expected to begin raising rates at some point,” Brown noted. Adams added that “the market still seems to be awaiting clarification about what the Fed will do, and until that happens, the volatility should continue.”

So, our focus remains on long-term gains both for the economy as well as your financial plan. We hope yours will, too. Of course, we’ll continue to monitor market movements for enduring trends and make adjustments accordingly.

Source: Bloomberg.
Investing involves risk, and investors may incur a profit or a loss. Past performance is not an indication of future results. Investors cannot invest directly in an index. The Dow Jones Industrial Average is an unmanaged index of 30 widely held stocks. The NASDAQ Composite Index is an unmanaged index of all common stocks listed on the NASDAQ National Stock Market. The S&P 500 is an unmanaged index of 500 widely held stocks. The performance noted does not include fees or charges, which would reduce an investor’s returns. There is no assurance the trends mentioned will continue or that the forecasts discussed will be realized.
Securities offered through Raymond James Financial Services, Inc., member FINRA/SIPC

I refer many of my customers to my son and his team at Southwestern Financial Group in Cool Springs. He’s operating his practice like I operate mine – person to person – one case at a time and he gives each of his clients the attention they need to navigate the calm and sometimes turbulent waters with their financial portfolio. He’s available to you as well. Reach him at 615.861.6113 or at Chris.White@RaymondJames.com.

We here at Benton White Insurance watch these financial developments closely because investment gains/losses affect insurance companies profits/losses. In the big scheme of things, sooner or later those very issues can trickle back to the insurance premiums we all pay. In long-term planning, this latest financial event could be just a ‘blip’ on the big radar but newsworthy and merits us keeping a keen eye on the developments just the same.

If we can help you with your insurance, we’re here and always ready to earn it. You can email us at info@BentonWhite.com or contact any of our staff at 615.377.1212