Fueled by another weak domestic economic number, today’s being the ISM Manufacturing Index, stocks tumbled once again, as market indexes are heading for the official “correction” moniker. First, a thought about the recent economic weakness. I know it is a “way too often” used excuse, but weather in this country for the last couple of months has been horrendous. If there hasn’t been a lot of psychological damage, it seems likely this will even out once the weather situation subsides. If not, if indeed the economy is slowing, then stocks were overpriced in the near term.
Nevertheless, stocks took a beating today with the Dow Jones Industrial average losing 326 points to finish at 15,372. The S&P 500 was down 40 to close at 1741. Gold was up $18 to trade at $1257, while oil was down $.79 to trade at $96.70 per barrel WTI.
The early action in the markets this year reminds us that investing isn’t easy, and stocks don’t just go straight up. That is why we identify our risk parameters and know the path we have chosen to achieve our goals. Remember rising markets give us a chance to sell some things, while falling markets give us a chance to buy some things. Our feeling at the end of last year was that investors were becoming complacent and a little too comfortable. This “correction” should get everyone’s attention and remind investors to remain on the path that is comfortable to them. We’ve been through volatility before. We’ll get through this too.
Have a nice evening everyone.