The U.S. stock market has been in a correction since early October, joining many of its global peers that had been weak months before that. There have been bouts of heavy selling followed by rallies, but prices have not yet reached down to levels that have attracted sustained new buying. We think that point is getting close, but the road from here to there could still be a rough one. That said, we regard this as a correction and not something more; we think the market advance that began in 2009 has further to run. None of our major recession indicators are flashing red, let alone yellow. We remain comfortable holding a Market Weight position in overall equity exposure in global portfolios—in other words, investing at the long-term strategic allocation level. Please read the article “Coping With the Correction” for further details.
We look forward a change in market direction in 2019.