Towards the end of last year and in January of 2018, interest rates and inflation expectations had been slowly moving upward, yet equity markets took it in stride. However, that changed when January wage growth was reported at 2.9%, above the recent trend of about 2.5%. This raised questions in investors’ minds about the outlook for inflation and how the Fed would react.
For now, we believe the global correction appears to be over, but more confirmation is needed. Our Investment Management Unit will be looking for receding volatility and continued improvement in short-term breadth indicators, leading to breadth thrust signals. We will also be watching for outperformance from the positively-correlating Tech sector and other risk-on sectors (such as high yield bonds) among other indicators.
WHAT SHOULD WE DO?
Historically, stocks experience a correction of 5% or more about every 10 weeks; we had been 80 weeks without one. This correction was long overdue. A sound financial plan can eliminate most, if not all, of your worry associated with short-term performance of the financial markets. Make sure you have a plan in place. Be disciplined and stick to your plan. And:
Remember, worrying about your investments won’t make them drop less in a scary market; just as worrying about your job won’t help you keep it and worrying about your health won’t help you avoid disease. In fact, can you name one thing that got better because you worried about it?
If you reside in the Jackson, MS area, mark your calendars for our Februrary 28th event at the Country Club of Jackson, What’s Next for the Financial Markets?, from 5:30 pm until 7:00 pm. Hear from our special guest speaker, David M. Lebowitz, Global Market Strategist for J.P. Morgan Asset Management, as well as the members of our talented Pinnacle Trust Investment Management Unit. If you can’t make the event, don’t worry. We’ll have the recorded event up on our website for you to view at your convenience.
Stacey Wall serves as Chief Executive Officer at Pinnacle Trust. You can reach him by calling the office at 601-957-0323 or by emailing him at firstname.lastname@example.org