This week so far ,investors seem to have brushed aside fears of rising inflation (which triggered last week’s volatility) and tried to put last week’s worst performance, which was the worst in two years past them.
The first few days of February have resulted in a long overdue and much anticipated equity market correction.
However volatility still lingers, with the major indices on Wall Street climbing more than one per cent shortly after the open, then giving about half of the gain back before rebounding further. In late afternoon trading, the Dow Jones Industrial Average was up 2.27 per cent, at 24,740.28 and the S&P 500 was up 1.73 per cent, at 2,664.97. The Nasdaq Composite was back above 7,000 points, up 2.10 per cent at 7,018.87.
The question is whether markets will consolidate at current levels or whether more volatility is in store.
We have no way of knowing what markets have in store but are constantly reviewing our technical indicators which will provide a lead should we believe that defensive strategies are appropriate for our client’s portfolios.
Volatility is unfortunately an unavoidable by-product of investing in the markets, but we do believe that the diversification our clients have in their portfolios will assist in dampening the effect of any market downturn as they have exposure to all the major asset classes.
In the light of the current environment we thought that the following link may provide some light relief.