At one point yesterday, the S&P 500 was down more than 10% and the NASDAQ was down more than 20% from their all-time highs. Investors have been spooked by Jerome Powell’s inflation comments and believe that the Federal Reserve will tighten more than previously thought.

Economic recessions are what usually cause bear markets. The data that we have on the economy does not appear to point at a recession in the near future. Not to mention that history would tell us that it is also unlikely to have another recession so soon after the one experienced as a result of the pandemic.

Trying to time the market and make switches usually leads to significant underperformance. We end up buying when we should be selling and vice-versa. The best strategy is to have a long term plan and a diversified portfolio. If we make the correct adjustments to the portfolio when we create them, we don’t have to make too many adjustments when the market is volatile.

Please feel free to give us a call at any time.

Milan