by H. Lee Wall, CPA/PFS, CFP
Another tumultuous session occurred Monday, Columbus Day, as we saw a large drop in stocks. The stock exchange has been remarkably volatile for the past week with several 1% or more moves in the indices from day to day, seemingly with no memory of the day before. The markets seem to be trading on nothing but technical, with computer driven trades accentuating the ups and downs.
Yesterday, the price action was extremely negative and it appears that a selling climax is close at hand. Many companies, especially in the energy sectors, are down 30% from where they were a month ago.
In the past, these panic selloffs created good buying opportunities. Whether this is one of those times—we will have to wait and see. I am taking a cautious approach before committing additional capital to the equity markets.
Our portfolios have been on the cautious side but market sellouts come with increased risk. Many times, no matter how good the companies or the sectors that you own, it all gets sold.
As always, we are available to discuss any concerns you may have. We will continue to actively monitor our positions and adjust accordingly.