Another difficult day of trading. Stocks tried to rally early in the day, but by late morning, we were in the red and falling. After a pause in the late afternoon, stocks drifted further into negative territory, tacking on to the miserable start for 2016. When the Fed Beige Book data was releases at 1:00, showing tepid growth and very little inflation, stocks fell further into the close.
For the day, the Dow Jones Industrial Average was down 364 points to close at 16,151. The S&P 500 was down 48 points to finish the day at 1890. Gold was up $9 to trade at $1094 per ounce, while oil was up a whopping $.35 to trade at $30.79 per barrel WTI.
As we mentioned in the quarterly yesterday, we believe we are in a cyclical (not secular) bear market and have been so for some time now. This unwinding that we are seeing early in the year is just an acceleration of the process. Once again, it is not unusual, it is part of the process, and it won’t last forever. For those of you who aren’t clients of CHJ (and why is that?), just be sure you are comfortable with what you own. I always use this analogy for those who own a home. If your home’s value, because of market conditions, falls in value from $300,000 to $200,000 you don’t sell it. You live in it. If you are comfortable with your investment portfolio and like what you own (Apple, Starbucks, Nike, Johnson & Johnson, Exxon Mobil, etc.), then just live in it. You don’t have to sell your house when it drops in value, so why do you have to sell your investment portfolio?
Have a nice evening everyone.