You have probably heard several times on the recent news: “the Dow had its largest point drop in history today”

 

A few thoughts

 

• A more reasonable way to look at this is in terms of percentages. Drop was closer to 4% which is not trivial but not near the larger % drops in history such as 1987 (over 20%)
• This move takes the Dow back to where it was in December (about 2 months ago)
• Market needed a correction. While this was more than most anticipated it is well within the range of normal pullbacks.

 

Things we are watching for that would cause us to become more cautious

 

• Downturn in leading indicators
• Inverted yield curve
• Federal reserve raising interest rates quickly
• USD increasing quickly

Our Portfolio Advisory Group has published a piece on the recent market volatility and what this can mean.  Click Here to read more.