WHY THE LAST TWO DAYS ARE A GOOD REMINDER OF WHY …
WHY THE LAST TWO DAYS ARE A GOOD REMINDER OF WHY IT'S IMPORTANT TO TAKE A LONG TERM VIEW
As you have likely seen in the news, over the last two market days the Dow Jones Industrial Average (DJIA)i declined 7% over the last two market days. However, it is important to remember that even after the last two days, the DJIA is up 20% over the last year; a great year by historical standards.
What has driven the recent drop? From my perspective, there are three factors:
? Investor profit taking. Given the appreciation U.S. equities over the last few years, some investors may be existing positions to realize profits.
? Trading algorithms. As traders' use of trading algorithms have become more commoni i, declines in a market can have a ripple effect and even exacerbate declines in other markets.
? Anticipated Federal Reserve rate hikes. Strong wage and jobs growth, while signs of a strong economy, also signal that the Federal Reserve may increase the Fed funds rate to prevent `overheating' which can contain economic growth.
Looking forward, there are two primary reasons why we remain optimistic:
? History. This is not the first time we have seen this. Since 1987, there have been six instances where the DJIA has declined by 7% over a two-day period. In those six instances, the market on average increased 7% over the next 12 months
? Strong US economic fundamentals. Based on recent jobs growth, wage growth, and unemployment of only 4.1%, we believe the US economic outlook remains positive.
While we remain positive about the outlook, the last few days remind us that the market can be volatile, and that it is important to take a long-term view and stay the course.
Should you have any questions please reach out to your HD Vest Advisor.
James Hickey
Chief Investment Officer HD Vest
The views and opinions presented in this article are those of James Hickey and not of H.D. Vest Financial Services? or its subsidiaries.
Securities offered through H.D. Vest Investment Services?, Member FINRA/SIPC, Advisory services offered through H.D. Vest Advisory Services?, 6333 N. State Highway 161, Fourth Floor, Irving, TX 75038, 972-870-6000.
Investments in individual sectors may be more volatile than investments that diversify across many industry sectors and companies. Certain sectors of the market may expose an investor to more risk than others.
iDow Jones Industrial Average is unmanaged and measures broad market performance. It is not possible to invest directly in an index. ivInvestopedia, 2015
................
................
In order to avoid copyright disputes, this page is only a partial summary.
To fulfill the demand for quickly locating and searching documents.
It is intelligent file search solution for home and business.
Related download
- why the last two days are a good reminder of why
- dow theory the key to understanding stock market movement
- the dow jones island index the wall street journal
- market attributes u s equities april 2019 s p dow
- thewallstreetjournal we dnesday dow jones
- s p dow jones indices s p tsx canadian indices
- s p tsx global mining index
- top news today dow jones company
- percentage positive and negative days across
- dow jones averages s p dow jones indices
Related searches
- what are some good qualities of a teacher
- when you are a good person
- writing a good statement of purpose
- what is a good rate of return
- how many days are in a year
- can a stomach virus last two weeks
- a good definition of government is
- current events in the last two weeks
- what is a good definition of leadership
- good to the last big titty fuck
- what is a good coefficient of variation
- in the last days perilous times