The Prudent Retiree - What's Going On Part IV

Last week we rode the roller coaster down. Yesterday, Monday, we started strongly back up. Was last Friday the bottom? No one knows. Roller coasters go up and down so you should buckle up for more thrills.   

 Since no one knows, it is always best to listen to the market. The action of the market itself, not anyone’s prediction, is the only real truth. Prudent Retiree believes the market is telling us this is a contained correction. We are not on the cusp of a 2008 style crash. All corrections run their course and the market resumes an uptrend. We believe that is how the current situation will play out.    

Last week’s violent correction was frightening. Prudent Retiree observed that in the past few years the velocity of corrections has become gut wrenchingly faster. (I think that is an appropriate adjective) Computer trading has made this a new reality. The magnitude and volatility are the same. The time is just compressed.  

Coronavirus is tragic. So were the many other outbreaks of new types of influenza that we’ve experienced in the past. Keep in mind that cures and vaccines have always been found. Perhaps Coronavirus will turn into a Stephen King novel. Nothing will matter at that point.  

So, what’s going on? We believe volatility will continue for a time, but there won’t be a crash. The Fed has just cut rates by 50 basis points and the rates on ten and thirty year Treasuries are at all time lows. Low interest rates have fueled the economy and the market for the past ten plus years. We expect more of the same. Prudent Retiree recommends that you maintain existing portfolios. We are monitoring the risk and will keep you informed. Thank you Marvin.    

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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