The first week of the new year has seen a rocky start to the stock market. Volatility in the Chinese market has spread throughout the globe. No one knows what will happen in the short term, but we’re not overly concerned about the recent volatility.
When stock prices get into the fairly valued range, based on earnings, sales, cash flows and other measures, as they are today, we can expect periodic volatility with the occasional 10% correction. We see these as good buying opportunities and we pointed this out at last year’s lows in late August. In fact, if you followed our advice and bought the day after our August 24th post, you got in at the lowest stock prices of the year.
If you’d like more of our thoughts on the current kind of stock market volatility, the August post is worth reading again. Or feel free to contact us. In addition to the stock market, we also see the high yield bond sector as especially attractive today.
Our 2016 Crystal Ball Outlook provides our outlook for the year ahead.
