Markets Keep Churning

by The Investment U Research Team

Falling knives, blenders and analogies to seasickness are easy to conjure up with regard to the markets movements as of late. One day we’re up the next we’re severely down.

Unfortunately, this will only get worse in the upcoming days and weeks.

The reason is simple, there isn’t any catalyst that is strong enough right now to overcome the opposing side. We are seeing stories about risk tolerance increasing and competing stories on investors fleeing to Treasuries.

It’s quite clear that the market’s rally has lost it’s footing, but it isn’t entirely obvious where we’re headed. From its high in trading on August 6 to its close on the 17th, the S&P 500 (.INX) has dropped almost 4%.

While that’s not significant enough to pop up on any economist’s computer screen, there are many traders and institutional investors who are going to be asking themselves if we’ve crested and are in the first stage of a prolonged pullback.

Going further we’re going to see more investments move into attractive buying ranges. And investors who can hold their lunches down long enough to maintain a sure footing are going to be well placed to jump back in – not just financially, but emotionally as well.

Because one of the biggest concerns we’re starting to see, is investors “checking out” again and ignoring their accounts when they don’t like the looks of the markets. Don’t, it will be worth your while soon enough.

Symbols mentioned in this article: .INX.

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