08/26/2015
Recent Market Volatility

Recent Market Volatility

As most of you are aware, volatility has returned with a vengeance to global markets. Yesterday, at the opening bell, the Dow Jones Industrial Average dropped more than 1,000 points before recovering to ultimately finish down 588.40 points, or 3.6%, on the day. Today, US stocks are rallying, and both the DJIA and S&P 500 are both up more than 2% as of 12 p.m., while European stocks are also rebounding sharply, with stocks in Germany, France and the U.K. all gaining 3%-4%.

Volatility can be unpleasant, but it’s not entirely unexpected. Prior to yesterday, the U.S. stock market had gone almost 4 years, since the 3rd quarter of 2011, without a correction of more than 10%. Furthermore, some asset classes including Managed Futures and Investment Grade Bonds, have gone up during the sell-off of the last few days.

To help put these market swings in perspective, below are some articles and analysis from sources we respect and trust, Vanguard, Schwab, and The Wall Street Journal. With the benefit of hindsight, market corrections that have occurred in the past are always viewed as opportunities, while those we are experiencing in the present, are seen as threats. We encourage you to view the current decline not as a risk, but as an opportunity. Working together, we can improve the chance of success by not panicking when market turmoil erupts.

https://advisors.vanguard.com/iwe/pdf/crc/Market_Volatility_Bounceback.pdf

https://www.schwab.com/public/schwab/nn/articles/Panic-Is-Not-a-Strategy-Nor-Is-Greed

http://blogs.wsj.com/briefly/2015/08/21/5-things-investors-shouldnt-do-now/

Best regard,
OptiFour Team

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