Market Update. The market corrects itself. Riding the tiger of volatility
- Balanced ETF Portfolio up 8.1% over 1 year.
- Growth ETF Portfolio up 9.2% over 1 year.
- Aggressive ETF Portfolio up 10.3% over 1 year.
See more about how our portfolios performed.
As every investor who hasn’t been hiding under a rock knows, the stock market took a bit of a tumble last month… before more-or-less bouncing back. Not all the way back, mind you. The Dow plunged 1,000 points not once, but twice. You could hardly blame investors for getting a little nervous.
Bad news, good news… and more market news to come
Two things our clients should know. First, absolutely, the temporary downturn did impact portfolios. For the first time in nearly two years, our portfolios dipped significantly. (As you can see above, though, our portfolios have nonetheless performed exceptionally well over the course of a year).
Second, our portfolios are specifically diversified beyond equities to minimize the effect of volatility.
We’re also positioned to take advantage when the good times return — and since the correction, we may well be up for another good run.
The economic fundamentals are strong. US corporate profits, jobs, bonds all looking good.
Ironically, the big story remains just how good we’ve got it. The S&P 500 clawed back gains in February, buoyed by growth from Silicon Valley titans like Amazon and Netflix. The recent US tax reform bill is super-charging corporate profits (which, in turn drive stock prices).
Meanwhile, jobs numbers beat expectations and wages remained mostly in check, softening concerns around inflation. Some inflation is happening – heating up the bond market – but again, that’s actually a sign of a strengthening economy.
Slower growth on the international horizon
While North American markets regained some of their balance, there are concerning signs from overseas. Europe’s stock markets were basically flat for February. The Nikkei dropped by 1.4 percent and South Korea and Hong Kong’s stock markets saw similar slides. On the other hand, emerging economies saw some good news in their bond markets. It may be a mixed bag, but on the other hand, foreign markets were positioned for better news in March.
What does all this mean for your investments?
In February, the market correction everyone was waiting for finally happened… and in our rear-view mirror, it is starting to look less worrisome than it first appeared. Nonetheless, our portfolios remain focused on diversification as we remain in period of higher ups and downs.
Do you have questions about your investments at WealthBar? Set up a call to talk to your financial adviser, who can help you get the answers you need.