The Prudent Retiree- February 2018

“How many legs does a dog have if you call his tail a leg? Four. Saying that a tail is a leg doesn’t make it a leg.”

          - Abraham Lincoln

Our 16th and arguably greatest president was born this month. The stock market is in a tailspin this month. What do we call this sell off—a profit taking correction or the start of a major crash? The Wall Street Journal over the weekend said that believe it or not, sometimes stocks go down. Four legs are four legs.

We have been saying for quite some time that the market was due for a correction. Since November of 2016, it has pretty much gone straight up. That correction seems to be upon us. Let’s listen to the market, not the pundits on television. We don’t predict and believe it’s way too soon to say a 2008 style crash is imminent.

Wages and interest rates have increased a bit. There is renewed fear of inflation. Higher rates and inflation are not friendly to the market. We are still far below rate levels that have historically heralded serious market damage. The economy appears healthy and corporate tax reform seems to be having a positive impact.

We believe this decline is normal profit taking. The market is still significantly higher than a year ago. Prudent Retiree does not think the tail is a leg yet. Our economy seems to be strong and business and people will have more money to spend and invest. Interest rates remain at historically low levels. These factors are positive, but we will listen to the market and change course if warranted. 

Here at Horseman Group, we strive to provide you with the highest possible level of customer service. Feel free to reach us at 314.692.7842 with any questions regarding your investments, risk management, or retirement. 

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Horseman Group – 3 CityPlace Drive - Suite 290 – St. Louis, MO 63141 – 314.692.7842 – www.horsemangroup.com Securities and advisory services offered through LPL Financial, a registered investment advisor. Member FINRA/SIPC. The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results.
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