As you are well aware, we’ve seen a very negative start to the markets in 2016. Many people are asking “Why are the markets going down?” We can give you the reasons: China, rising rates, and the crashing price of oil; however, the biggest reason stocks are going down is because investors are fearful and confused. Investors are fearful because many talking heads, analysts, and so-called experts feel the need to incessantly predict the next recession.
Most of these talkers carefully hedge their predictions so they can distance themselves from their bold statements when they are inevitably wrong. They usually say things like, “We are at an increased risk of recession.” Then when later questioned about being wrong about a recession, they point out that they didn’t outright predict a recession, but rather said we have increased risk. As you can see, by carefully hedging their statements, they will appear to have been right.
So here’s our advice directly to our clients: stop listening to predictions of recessions or other fearful events. We have a long-term, diversified, and well-planned strategy in place. With that said, please disengage from the anxieties and inaccuracies flying around in the media. Instead, focus on your families, and focus on your lifestyles. We encourage you to take a big, deep breath and enjoy your life.
Market down turns will not last. We will ultimately cycle through this volatile period. The key, as most of you know, is not to make mistakes during down turns like this. We want you to stay put, turn off the TV, and go have fun. Don’t let these short-term, emotional events, deter you from a strong, long-term strategy.
Please understand, as always, we are diligently reviewing your portfolios. There will be a few small changes to your portfolios in the coming days. Part of these changes are routine, and part are a reaction to the current market conditions. Our reactions are geared towards allowing you to take advantage of this tremendous buying opportunity. These changes will be explained in a communication to you at the time the changes occur.
We have attached an analytical article from renowned economist Brian Wesbury. It will further explain what we are seeing in the markets right now. As always, please feel free to call our office if you are concerned and need to talk about the current market conditions. That’s what we are here for.
Thank you for the confidence you place in us.
Ryan Craner, John Park, and Staff
For the additional article
These are the opinions of Ryan Craner and John Park and not necessarily those of Cambridge, are for informational purposes only, and should not be construed or acted upon as individualized investment advice.