Japan's Impact on Markets

Fears over Japan nuclear crisis & political unease in the Middle East have lead to a market correction in the magnitude of 5%. Even so, with the run up early in the year, the markets are break-even for the year.

We’ve talked before about market corrections. On average, the market has 3-4 corrections each year of +/- 5% (right where we are today), and 1.1x per year it corrects +/- 10%. Those corrections are “normal” market conditions. One never knows what causes the corrections (last year we heard double-dip recession, financial crisis of Greece / Portugal, Gulf oil spill, A slowing down of China, etc).  

While we continue to closely monitor the situation, we are still within the normal range of market volatility. You can’t predict the future, but you can plan for it. We have a plan in place on how to react to changing market conditions & we continue to execute that plan to help clients stay on track through difficult & emotional times.  If you’d like to discuss your situation in more detail, we’re only a phone call away.

I’ve shared Bob Doll’s thoughts before & he has another nice commentary this week:

• In the short term, these issues do cause volatility.
• Doll points out that disaster, natural or otherwise, usually have only a temporary economic impact
• The big caveat – unless there is a sizeable and permanent political policy response.
• He do not believe oil prices have advanced to the point that they will derail the economic recovery
• Recent data has continued to show that the economy is improving.
• Last week, for example, February retail sales figures were released and showed that higher energy prices have not stopped consumers from spending

Read his full commentary HERE

Additionally, here’s a 3 min audio by Mark Tepper, president and founder of Strategic Wealth Partners, says better days are ahead. Tepper says the market was overdue for a correction and he expects the stock market to be higher within a year. HERE