So what now?
After the dismal month of May and a world of drama on Friday following those very poor job numbers, we felt compelled to write at least a short note this weekend. We had one of the best quarters ever to start the year, followed by giving most of it back. Risk on, risk off. More of the same. So what are we to think now?
Well, first of all, I think we need to stay calm. It is easy to feel panic when things go sharply south, and easy to get excited when things look better and markets rally. But it is impossible to tell what is coming next. Developments month to month cause big swings, and we have to get used to that; it is unlikely to end anytime soon. As we have said many times, set the right risk level—basically, your percent of equity—and be prepared for a rough ride.
Let me just remind you that corporate earnings continue to be high, and cash balances are as well. Innovations and new developments abound. But all this uncertainty causes companies to hold back on what could otherwise be productive investments, and people will not spend money in a climate of fear. Unfortunately that can mean a protracted period of anemic growth and high unemployment, but it does not necessarily mean bad equity returns. Buying when people are fearful and prices are relatively low often works out rather well in the long-run. But no one said it was easy.
Wipfli Financial Advisors, LLC (“Wipfli Financial”) is an investment advisor registered with the U.S. Securities and Exchange Commission (SEC); however, such registration does not imply a certain level of skill or training and no inference to the contrary should be made. Wipfli Financial is a proud affiliate of Wipfli LLP, a national accounting and consulting firm. Information pertaining to Wipfli Financial’s management, operations, services, fees and conflicts of interest is set forth in Wipfli Financial’s current Form ADV Part 2A brochure and Form CRS, copies of which are available from Wipfli Financial upon request at no cost or at www.adviserinfo.sec.gov. Wipfli Financial does not provide tax, accounting or legal services. The views expressed by the author are the author’s alone and do not necessarily represent the views of Wipfli Financial or its affiliates. The information contained in any third-party resource cited herein is not owned or controlled by Wipfli Financial, and Wipfli Financial does not guarantee the accuracy or reliability of any information that may be found in such resources. Links to any third-party resource are provided as a courtesy for reference only and are not intended to be, and do not act as, an endorsement by Wipfli Financial of the third party or any of its content or use of its content. The standard information provided in this blog is for general purposes only and should not be construed as, or used as a substitute for, financial, investment or other professional advice. If you have questions regarding your financial situation, you should consult your financial planner, investment advisor, attorney or other professional.