Just days after the 10th anniversary of the start of the 2008 –2009 market crash, volatility has returned. On Wednesday, the Dow declined 831 points and Thursday the Dow declined another 546 points.
The two-day decline represents a pullback of more than 5% for the index. While the pace and size of the decline is startling, as we sit here on Friday the broad equity indices are still higher than they were back at the start of the year.
The current market rally is nearing its 10-year anniversary, so a pullback should not be surprising. The Fed continues to raise rates and trade certainty with China seems no closer, but market volatility should always be expected and the rules we discussed this week still hold true today.
- In times of crisis, our priority is to address the questions and concerns facing our clients and their participants. They rely on our knowledge and experience to provide context in chaos.
- When the numbers are terrifying, you must have confidence in the fundamental research you’ve conducted. When all investment products are off 20-50%, relative returns are useless. Only confidence in your knowledge of the investment managers you’ve recommended can help committees avoid reacting.
- Time is our friend. Much of what we did in 2008 and 2009 was educate clients on why acting now, faced with fear, would be the wrong choice. Time has born that out as the right approach.
As always, please contact us with any questions or concerns you may have.
Multnomah Group is a registered investment adviser, registered with the Securities and Exchange Commission. Any information contained herein or on Multnomah Group’s website is provided for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. Investments involve risk and, unless otherwise stated, are not guaranteed. Multnomah Group does not provide legal or tax advice. Any views expressed herein are those of the author(s) and not necessarily those of Multnomah Group or Multnomah Group’s clients.