On this week’s episode of Tape Talk, Quint and Daniel explore the recent volatility in the stock market and discuss what some of the driving forces may be behind these moves.
There are a lot of different headlines one could point to for the recent uneasiness in the stock market. There is geopolitical risk with Saudi Arabi, trade wars with China, and internal strife between the President and the Federal Reserve. We’ll explore a few of these excuses for the market’s movements and consider whether they’re the cause or it’s simply investors’ changing expectations.
Elements of Expectations
When expectations change so do prices. Is this what we’re seeing currently in the market? It could be! When investors have priced in perfect news they may just be apt to sell what’s construed as merely “good” news. That is one of the keys Quint is watching in the market now. The market selling off on good news gives him concern here and he’ll be watching for it to be bought on bad news as a sign this latest temper tantrum is over.
What’s An Investor To Do?
The key to navigating markets as we’ve seen recently is to know what group of investors you’re in. Are you still accumulating wealth with years until your goal is in sight? If that’s the case you may want to be a holder and buyer as the market goes lower. Are you near or at retirement? You may not be able to stomach the volatility and need to consider proactive steps in your portfolio or a more prudent allocation. Retired and can’t sleep at night because of the market risk? It may be time to ensure your portfolio lines up with your risk temperament.