There’s an old saying related to the stock market that dates back to the time before computers, “Don’t fight the tape”. The term “tape” refers to the ticker tape that used to transmit the price of stocks. The idea, of course, is that when stocks are trending in a certain direction it usually doesn’t make sense to bet against the trend. This often holds true, at least in the short-term, even when reason might not agree. I’ve been communicating to my clients that fundamental reasons abound for potential growth in the economy and also stock prices. A friendly regulatory environment, favorable tax rules, low unemployment, earnings growth, low interest rates, increasing wages . . . the list is long and positive. But in some market environments, when human emotions and a steady stream of negative news have an impact on the buying and selling, business and economic fundamentals don’t seem to have as much influence as they should. We have likely entered such a period.
The the following link is to an informative piece that I use often in new client meetings to help explain the investment strategies that we use. Bulls and Bears
I’m not going to debate whether we are in or entering into a Bear Market or not, investing is a long-term affair and the statistics all point towards the value of staying invested. This is the case even if it means riding out some rough periods which are historically far shorter than periods of growth as the attached graph clearly shows.
If you’d like more information on how to manage volatility within your investments and incorporating strategies that offer various levels of protection, please don’t hesitate to contact us!
Jack Schniepp is a CERTIFIED FINANCIAL PLANNER™ (CFP®, ChFC®) and the owner of Cascade Financial Strategies. CFS is a registered investment advisor licensed in Oregon, California and Idaho. They specialize in socially responsible investing which integrates environmental, social, and corporate governance (ESG) criteria into portfolio construction.