WEALTH MANAGEMENT
Wow… What a ride! Ever since
America found out that our new
president would be: President
Trump, we have witnessed a huge
stock market gain all the way up
to late January 2018. Although it is
difficult to pinpoint exactly why
the market has suddenly “sold off“
from a high of 26, 000 points down
to the mid to low 24,000 range in
the early weeks of February. A
few things are fairly clear, we
have experienced a large amount
of optimism in reference to tax
reform, with some renewed concern
of what the new federal reserve is
going to do next. Equities had an
almost uninterrupted rise upward
into 2017 as market volatility was
nearly nonexistent and remaining
near record lows for most of the year.
A few examples of this low
volatility were:
The S&P 500 index produced a
positive return in every month of
2017. Research tells us that this
has never happened before in a full
calendar year.
Also, the S&P 500 index did not
fall by more than 2% in a single day
all year, and had just eight days
WOW… WHAT A RIDE!
where the index was up or down
more than 1%. This is the lowest
number of such days since 1964.
The Dow Jones industrial average
index set 71 new highs throughout
2017, the most new highs in a
calendar year since 1910.
After an extended period of
relative calm in the equity markets,
it is important to remember that
periods of heightened market
volatility are in inevitable. In fact,
the Dow Jones Industrials has
experienced a 10% or more decline
(market correction) roughly once
per year on average from 1900 to
2017 (source: Capital Research and
Management Company)
As the severity and duration
of equity market drawdowns is
impossible to predict, it is important
to remain fully invested, even during
periods of falling equity prices.
Market timing is an impartial
exercise as no one can consistently
identify market tops and bottoms.
Ultimately, this behavior results
in lower returns over a full market
cycle. Also, it is not uncommon
for the best days of equity market
92 TAMPA BAY MAGAZINE | MARCH/APRIL 2018
performance to quickly follow the
worst days. I should say...NOT
uncommon at all! Remember this,
remaining fully invested rather
than missing the best days can help
increase the probability of investors
meeting their long – term risk and
return objectives.
Retirement Wealth Advisors www.ASKsteveholland.com
727.724.3334
2637 McCormick Drive #101
Clearwater, FL 33759
* This material has been prepared for informational and
educational purposes only.
It is not intended to provide, and should not be relied upon for,
accounting, legal or tax advice. Please consult with a professional
specializing in these areas regarding the applicability of this
information to your situation.
Investment Advisory Services offered through Mutual Trust Asset
Management