Pathlight President, Adrian Larson, discusses investing versus speculating as it pertains to the recent market volatility and weakness.
Time to be thankful
Thanksgiving has come and gone and I am definitely thankful for the time I was able to spend with family and friends. Markets have not given us much to be thankful for if you are a short-term thinker however.
Earnings momentum for S&P 500 companies continued in 3Q18 as evidenced by the roughly 28% earnings growth and 8.5% revenue growth versus 3Q2017.
See the full earnings scorecard at http://lipperalpha.financial.thomsonreuters.com/2018/08/sp-500-17q1-earnings-dashboard/
Expectations for 4Q18 earnings and revenue growth have fallen a bit given the uncertainty around the global economy.
Recent market weakness is based on non-earnings related issues
We used the same header above last quarter and we are again faced with non-earnings related issues causing volatility. The main culprits have been Fed Chairman Jerome Powell’s 10/3 speech calling for aggressive rate hikes which caused markets to decline roughly 10% peak-to-trough. Additionally, the ongoing trade ware with China continues to weigh on markets, and the anticipated G20 meeting of Trump and Xi promises to provide another binary event with a good tweet likely moving markets higher and a bad tweet likely causing us to move lower.
Take a long-term view
In times like these it is of the utmost importance that you feel comfortable about your long term financial plan. You must be sure that your investments are aligned with your goals and risk tolerance. That is what allows you to weather the short-term problems and ultimately build the wealth you need in retirement. If you’re concerned, check-in with your Advisor and on your financial plan. If you don’t have a plan, there is no better time to build one, because you don’t buy an umbrella for sunny days.
Head over to the myPATH page to take a tour of Pathlight’s personalized financial planning platform and start down your path today.
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