You must be “this” tall to ride the market…
Do you remember being too short to go on an amusement park ride? The ride you were about to enter was likely full of large roller coaster ups and downs and only those over a certain height and age could stomach it. Like that ride’s caution or minimum height restriction think about your investing goal. If your investment goal is very near in the future you want to be careful how you proceed with the investments you choose.
The market has been flying to higher highs but will it continue?
As of late Friday, the recent government shutdown may worry investors of market volatility ahead. We do agree that volatility will probably come back to be more frequent than what we saw in 2017. We have to see progress from politicians in the days ahead to come together passing legislation that will move the economy forward. As we have shared before we are also in the beginning of earning season. This fourth quarter earnings report from companies will share if companies are still seeing strong sales and profits. We believe the market still has room to run higher even in the midst of the volatility we expect to see more of.
Bull Markets & Recessions
Since this bull market has been running strong for several months there are analysts who worry when the next recession is. We don’t believe a recession is right around the corner but over the next year or two market growth could slow significantly and maybe even start to move into recessionary territory. You want to be sure that your investment goals have time to run and that the funds you are investing are not those that would be needed in an emergency.
So, in short we see this market moving higher with more frequent periods of volatility, before heading into the next recession. Be sure that you aren’t jumping into an investment just because everyone else is. Have an emergency fund in place and have a clear idea of the goals you are saving for. Then you can allocate your investments appropriately for growth. Being prepared will help you to withstand any ups or downs the market takes, just like that height restriction that kept you safe for the ride you were getting ready to step on.