Stocks experienced their first significant correction in February after a steady 15 month rally. Does this recent bout of volatility change our long-term positive outlook for the stock market? In a word, no!
Market commentators highlight a number of “reasons” for the sharp market pullback. Ironically, the most frequent observation is that the U.S. economy is getting too strong and interest rates are rising much faster than investors expected. The fear is that rates will rise too fast and choke off the economy, thus leading to the next cyclical bear market for stocks. We do not agree with this fear.
While acknowledging we have enjoyed a nine year economic expansion, it is normal to see interest rates rise as the business activity shifts into a higher gear. However, at this time, we believe the Federal Reserve has no intention or reason to allow rates to rise to the point of stopping this economic growth.
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Disclaimer: Pring Turner is a Financial Advisor headquartered in Walnut Creek CA, and is registered with the Securities and Exchange Commission under the Investment Advisers Act of 1940. The views represented herein are Pring Turner’s own and all information is obtained from sources believed to be accurate and reliable. This information should not be considered a solicitation or offer to provide any service in any jurisdiction where it would be unlawful to do so. All indices are unmanaged and are not available for direct investment. Past performance does not guarantee future results.
Articles filed under Market Commentary
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