“Just when I think I have learned the way to live, life changes.” - Hugh Prather
So far, the month of October has brought us both a market correction and a weather correction. Many areas have been seeing above average rainfall, in part spurred by a variety of traveling tropical storms; now we add a cold front which has pushed south and announced the return of cool or very cool fall air. Some folks enjoy the warmer temps, others prefer the cooler, and both groups know that spring and fall mean we get both in the same week, if not the same day.
The markets have been on a bull run since 2009, so any kind of correction should not be a shock. Unless you are the media, in which case this is breaking news of the most dramatic kind. While the market gains starting in mid-2009 have been impressive, especially in their length of strength, we have seen several market corrections along the way. We have had periods, including earlier this year, were the markets traded in a “stagnant” range for 3-9 months. There was also 2017 were we set new records constantly as the market gained about 25%. Do not fear a week or two of declines. So far, they have not quite added up to even a 10% correction this round. Additionally, remember we had a 10% correction the end of January and first of February. The market averages one of these 10% corrections every 10-11 months over the past 70 years. This is nothing new, and while certainly worth noting and paying attention too, it is not anything to panic over.
Diversified portfolios, income and legacy planning, these are things we put in place which help temper some of this market volatility. To think a correction is not going to happen, or at some point another recession, is to think we won’t see a warm front push north in the winter months. They are not scheduled events, yet they are a normal occurrence.
Have a great week, and keep your “eyes on the prize”-don’t let short term vision ruin a long-term goal.
**Investors cannot directly invest in indices. Past performance does not guarantee future results.