“The S&P 500 continues to sustain its momentum due to continued activity and earnings growth along with renewed optimism over tax cuts,” as stated by Jeff Saut, Chief Investment Strategist, Equity Research for Raymond James.
While growth continues, somewhat stalled by hurricanes Harvey and Irma, and the path to tax changes unknown, one would expect additional volatility (amount the market swings). Although, with the strength of the ongoing market growth, volatility has remained rather low. It appears that every time the market drops, investors are treating these dips as buying opportunities by buying before any negative impact is felt. This is occurring because the investor still has confidence in the market.
This confidence has been supported by healthy earnings growth, positive economic growth and an extended period of low interest rates. Despite positive earnings estimates going forward, which supports future growth, does the fear that the markets are overvalued cause a correction to occur and volatility to return?
The real unknown is the unknown. What we do know and have experienced is that a well-developed portfolio can work over the long-term. Therefore it is important to manage your investments to the appropriate risk profile to ensure proper safeguards are in place to protect your funds should the market take an unexpected turn.
This is exactly what we do at AEGIS Financial. Please reach out if you have questions or would like to discuss your investment opportunities!
AEGIS Financial and Investment Committee
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