short-term

Correction Time : The Market Takes a Hit

    Correction Time : The Market Takes a Hit

After reaching all-time highs on January 26, 2018, the Dow Jones Industrial Average and the S&P 500 went into a two-week slide that saw both stock indexes drop by more than 10%, a decline that is typically considered a market correction.1

Analysts have been saying for several years that the long, booming bull market was overvalued and due for a correction, so the drop was not a surprise in the big picture.2 And even after the 10% plunge, the Dow was up 19% over the previous 12 months, and the S&P 500 was up 12.5%.3

It's natural to be concerned about this kind of shift, but more important to maintain perspective and focus on your long-term goals. It may be helpful to consider some of the reasons behind the surge of market volatility.

Normalcy vs. Complacency

Normalcy vs. Complacency

OK, a couple of my clients have wondered why I haven’t bothered to comment on the recent gyrations in the market. I might well have commented around February 7 when it appeared the sky was falling, but as it happened I was on vacation in St. John, one of the Caribbean islands hit hardest by last fall’s hurricanes (and happy to be there spending money, thereby helping the recovery efforts). Internet service on the island is still very sporadic, and we didn’t have any service where we were staying that week. Standing outdoors in St. John, it was nice and warm, and the sky didn’t appear to be falling at all, just blue and beautiful.

Of course, by the time I returned home the market indexes had begun to recover, and the Dow Jones Industrials and the S&P 500 ended last week up 4.3% each, their biggest gains in five years. Stocks are still off their recent record highs, but certainly things appear to have stabilized.

Happy of New Year!

Happy of New Year!

I closed off 2017 with an SRI Investing tradition, making two donations to honor you, my clients, in appreciation of the trust and confidence you place in us. Even more importantly, you care enough to invest your assets to help create a better world. The first donation went to Heifer International (www.heifer.org), helping to create financial opportunities in underserved communities worldwide. The second donation is to purchase carbon offset credits from Native Energy in Vermont (www.nativeenergy.com), to make our professional practice carbon neutral. Native Energy was founded in 2000 (the same year I started my SRI practice) and is now a leading provider of carbon offsets, renewable energy credits, and greenhouse gas consulting.