If you’ve been watching the stock market headlines over the last few weeks, you might think that we are in the midst of a market crash. While it’s true that the market dropped significantly at the end of January, it’s important to keep in mind that we have been experiencing one of the longest periods of growth and low volatility in years. The drop was a surprise to some, but many investors had been expecting a market correction for several months. Experts point to concerns that the Federal Reserve will hike interest rates more rapidly due to economic indicators such as wage growth and the latest Consumer Price Index report. Fears over inflation led to some investors taking profits leading to a downturn, but once again it’s important to consider the historical context. Interest rates have been at a historic low since the financial crisis in 2008 as the Federal Reserve attempted to reinvigorate the economy.
The market has rallied since the initial drop which is a positive sign for those who are concerned about their investments taking a lasting hit. Nobody can say for sure what is going to happen, however the low volatility that many had gotten used to may be gone. It’s important to keep your financial goals in mind and stick to your strategy.
All investing involves risk, including the possible loss of principal. There is no assurance that any investment strategy will be successful. Past performance is not indicative of future results.