It has been a very strong start to 2019. The broad-based S&P 500 Index has advanced nearly 18% in just four short months.
More good news: The S&P 500 Index has topped previous highs (Yahoo Finance). It’s quite a snapback from the gloomy outlook and oversold conditions we saw in late December.
Some of this year’s rebound is simply timing. After a steep sell-off last year, the major market indexes bottomed in late December. Therefor, much of the rally has occurred since the end of December. But let’s not discount the fundamentals.
What has been powering the rally?
With key indexes at or near highs, let me pose a question to you. How were you feeling when shares were getting beat up in December? Before you respond, there isn’t a right or wrong answer.
Did you look past the headlines, recognizing the financial plan was the best path to long-term success? Did the plan enforce discipline, preventing you from making ill-timed investment decisions? Were you comfortable with adhering to the long-term roadmap?
If the answer is “Yes,” your tolerance for risk is incorporated into your approach.
Or, did you get that queasy, unsettling feeling in your gut? Were you rattled by the swiftness of the decline? Did you experience sleepless nights?
If you answered “Yes,” let’s talk. Diversification helps manage risk, but it doesn’t eliminate risk. It’s possible that we may need to make some adjustments to your portfolio that may ease the downside when volatility strikes again.
As always, I’m honored and humbled that you have given me the opportunity to serve as your financial advisor.