This has been a very eventful year – a major tsunami in Japan, serious unrest in the Middle East and North Africa, debt worries in Europe and US political gridlock over the debt ceiling.
Through it all, the US stock market held up very well – until yesterday. It is hard to tell exactly what set the market off. The most plausible explanations are: possible worsening conditions in Europe, some economic worries at home and who knows what else.
In all likelihood, yesterday was an emotional overreaction. The market may continue to be soft for the balance of the summer and then begin to firm up in the fall. Odds of a double-dip recession are still low. And this is not likely the beginning of a new bear market. Our advice is to maintain a long term, well diversified investment portfolio.
If you have any questions or would like some additional help with your portfolio, please give us a call.