Markets in April

• March saw stock markets rise again with the S&P 500, NASDAQ, and DJIA indexes all closing Q1 at or near all-time highs. But there’s a lot going on underneath the surface.
• A lot of economists and strategists have been predicting a slowdown in the US economy, instead it’s almost been the opposite of that. Many data points are coming in showing the US economy continues to be strong and resilient; at the same time the Fed is saying they will not cut interest rates before they are convinced of the inflation data.
• This tug of war is causing persistent volatility week to week. And this past week, the S&P 500 had back to back days of 1% moves in opposite directions.
• Nowadays the stock market is reacting to every little thing. The best thing to do is buckle your seatbelt and be patient. And in today’s stock market turbulence can come from a myriad of places. But as we’re seeing this year, even through pockets of volatility, the market will rise on positive news. And the labor market, US consumer, and economy at large have all remained unexpectedly strong.
• Keep in mind that this stuff is impossible to predict. The market is sensitive right now and we think simply knowing that can help you stick to your investment plan, by not overreacting when the market over reacts.
• Investing is hard, due in equal parts to 1) not knowing what’s going to happen, and 2) having to live with the uncertainty. Too many bad investment moves are made when an investor can’t calmly handle an emotional response to short term volatility and instead remain patient. And all volatility is short term.
• So as the Macro landscape continues to change, if the market remains choppy, which we think it will, remain patient and confident. These environments typically present very good opportunities for active stock strategies and provide us good opportunities for rebalancing.

Joe Gallemore, CIMA®, Partner
Director of Investment Management