What a Difference a Month Can Make!
How different one quarter can be from the next. The stock market has reminded investors of those truths in a long post-Christmas rally.
In the fourth quarter, gloom came over Wall Street. Bearish sentiment grew and left stocks down for the year; the S&P 500 slid 9% in December alone. Some people scaled back their holdings in equities, thinking more tough times were ahead.1,2,3
Suddenly, the bulls returned, and an impressive rally began. At this writing, the S&P has gained nearly 20% since Christmas Eve, and stocks are off to their best start to a year since 1987.1
As this sea change demonstrates, the stock market is always dynamic. Episodes of upward and downward volatility come and go. An investor has to acknowledge that downturns are expected, and have patience when they do. Decisions made in the midst of market turbulence can backfire.
Your approach to investing and retirement should reflect your long-range objectives and goals, and acknowledge that ups and downs in the market may happen from time to time. While some of these ups and downs may be significant enough to signal a change in your asset allocation, need not change the fundamentals of your investment policy. The bullish beginning to 2019 has taught investors a lesson: have patience, and stay the course.