Stock Market Comment 3/11/20
This past several weeks have been quite eye-popping on Wall Street. However, two things I am pretty certain about:
- The Coronavirus will, at some point, be managed/contained, and no longer a major public health crisis.
- The stock market — every time it has slumped in the past — has recovered.
So the question is: how low will the markets go before we stabilize, then eventually recover?
As the markets during the latter stages of the bull run upward seemed to reflect only good news, and not any of the risks, we are now in the opposite situation. In my experience, previous drops in the markets have ceased when all or most of the risks have been “baked into the cake” — that is, been reflected in market valuation. When we reach that point (and we will—sooner or later), there could be some amazing bargains to be had.
With many of you, we have been defensive the last several years, as I have been concerned about the market reflecting only the good news, and none of the risks at hand. We may finally have an opportunity in the near future to pick up stock mutual funds at very good prices.
Patience is needed here, but historically market drops have provided great opportunities. Remember, it’s a marathon, not a sprint.
Bill McKinley at McKinley & Associates
This is being provided for informational purposes only, and should not be construed as a recommendation to buy or sell any specific securities. Past performance is no guarantee of future results, and all investing involves risk. The views expressed are those of W. McKinley & Associates and do not necessarily reflect the views of Mutual Advisors, LLC or any of its affiliates. Investment advisory services are offered through Mutual Advisors, LLC DBA McKinley & Associates, a SEC registered investment adviser.