Keystone Financial Group

Responding To Market Volatility

It seems that after a relatively quiet and positive 2017, that 2018 has seen the resurgence of volatility.  Remember that markets are discounting mechanisms.  This means that assumptions about the future are priced into current values.  Market valuations of one year ago had priced into themselves an assumption about the coming year, in terms of economic activity, earnings, interest rates, and other quantifiable metrics.  Since that time, we’ve seen the passage of the Tax Cuts and Jobs Act, and the imposition of tariffs among other things.  Sometimes, it can seem as though a single tweet from the President can cause the market to move by several hundred points.  What’s really happening is a re-pricing of risk as markets consider the degree by which previous assumptions about the economy change with new developments.

Relative to long term investment objectives, this is an opportunity and not time for knee jerk reactions.  Those with shorter term investment objectives shouldn’t have had a large exposure to market risk in the first place.  You must also consider the relative strength of the underlying economy.  The four week moving jobless claims average hasn’t been this low since October of 1968.  The ISM manufacturing index, and the ISM non manufacturing index continue to reflect strength and expansion.  Housing remains strong.  Non defense capital goods spending remains strong.  Consumer confidence and CEO confidence surveys remain at or near record high levels.  The underlying economic data in other words is robust.  In light of that, I would suggest that those with longer term investment objectives view periods of volatility as buying opportunities, to acquire more shares of companies, at lower prices, dilute your cost basis in the process, and allow natural market forces to work for you.

Remember the objective behind your investment plan, the length of time between now and the realization of that objective, and the plan derived for pursing that objective.  Also, remember that markets are often moved by factors that can’t be quantified on a spreadsheet.  Opportunities manifest when fear over the perceived seems to outweigh that which is quantifiable.  Lastly, recall similar recent periods of short term volatility for clues about what may transpire going forward.  We witnessed a deep, and short lived market correction in February of this year.  By the end of the first quarter, the markets had recovered to being nearly unchanged on the year.

Turn off the television.  Such is a source of sensationalism, and it will continue to be so through the mid term election.  The next 500 point decline isn’t necessarily the beginning of the next great recession.  You can only discern the tip of the ice berg from an ice cube if you have a deeper understanding of how markets price risk, what events cause the markets to re-price risk, and an appreciation of the relative economic strength underpinning the market right now.  Talk frankly with your financial advisor, and share your concerns but also listen to the dispassionate advice that you receive.  You hire a financial advisor to have the intestinal fortitude to guide you through periods of time such as these when the markets seem to behave irrationally.

Video Content

Things Aren’t Always As They Seem

Since February, the market has absorbed and reacted to many changes to previously made assumptions regarding the prospects for growth, and earnings.  These shocks were geo-political, and geo-economic in nature, and involved the sudden repricing of risk over tariffs, reciprocal tariffs, and the concern that a growth shock induced recession could be on the horizon.  

As of the middle of May however, we can quantify how those fears have seemingly abated, and markets have re-priced for that risk in a positive manner, underscoring once again the need to be stoic in your disposition when it comes to the allocation of an objective driven investment initiative.

Sometimes, things aren’t always as they seem, and navigating through the noise of sensationalism can feel like walking through a fun house of mirrors.  Within this video, I’m offering my thoughts on the reasons behind what turned out to be the sharpest and fastest draw down that we’ve experienced in 100 years, and furthermore, why did markets recover from that drawdown so quickly as well.  Were the concerns rational, or irrational?

From a tactical perspective, we remain dedicated to the goal of insulating ourselves from the sensationalism and hyperbole of the day, as we dispassionately adjust the exposures within our models, and act upon data driven conviction.

Please find a few minutes to view our monthly commentary, and please let us know if we can be of service.

Things Aren’t Always As They Seem

Since February, the market has absorbed and reacted to many changes to previously made assumptions regarding the prospects for growth, and earnings. These shocks were geo-political, and geo-economic in nature, and involved the sudden repricing of risk over tariffs, reciprocal tariffs, and the concern that a growth shock induced recession could be on the horizon.

As of the middle of May however, we can quantify how those fears have seemingly abated, and markets have re-priced for that risk in a positive manner, underscoring once again the need to be stoic in your disposition when it comes to the allocation of an objective driven investment initiative.

Sometimes, things aren’t always as they seem, and navigating through the noise of sensationalism can feel like walking through a fun house of mirrors. Within this video, I’m offering my thoughts on the reasons behind what turned out to be the sharpest and fastest draw down that we’ve experienced in 100 years, and furthermore, why did markets recover from that drawdown so quickly as well. Were the concerns rational, or irrational?

From a tactical perspective, we remain dedicated to the goal of insulating ourselves from the sensationalism and hyperbole of the day, as we dispassionately adjust the exposures within our models, and act upon data driven conviction.

Please find a few minutes to view our monthly commentary, and please let us know if we can be of service.

YouTube Video VVVkd3dBLXV6ZGNYTXZGVmoxNUlwOHp3LkNZTTZNR1dfQzVr
Keystone Financial Group 39

Things Arent Always As They Seem 2025 KFG 2

Keystone Financial Group May 17, 2025 2:46 pm

Things Aren’t Always As They Seem

Since February, the market has absorbed and reacted to many changes to previously made assumptions regarding the prospects for growth, and earnings.  These shocks were geo-political, and geo-economic in nature, and involved the sudden repricing of risk over tariffs, reciprocal tariffs, and the concern that a growth shock induced recession could be on the horizon.  

As of the middle of May however, we can quantify how those fears have seemingly abated, and markets have re-priced for that risk in a positive manner, underscoring once again the need to be stoic in your disposition when it comes to the allocation of an objective driven investment initiative.

Sometimes, things aren’t always as they seem, and navigating through the noise of sensationalism can feel like walking through a fun house of mirrors.  Within this video, I’m offering my thoughts on the reasons behind what turned out to be the sharpest and fastest draw down that we’ve experienced in 100 years, and furthermore, why did markets recover from that drawdown so quickly as well.  Were the concerns rational, or irrational?

From a tactical perspective, we remain dedicated to the goal of insulating ourselves from the sensationalism and hyperbole of the day, as we dispassionately adjust the exposures within our models, and act upon data driven conviction.

Please find a few minutes to view our monthly commentary, and please let us know if we can be of service.

Things Aren’t Always As They Seem

Since February, the market has absorbed and reacted to many changes to previously made assumptions regarding the prospects for growth, and earnings. These shocks were geo-political, and geo-economic in nature, and involved the sudden repricing of risk over tariffs, reciprocal tariffs, and the concern that a growth shock induced recession could be on the horizon.

As of the middle of May however, we can quantify how those fears have seemingly abated, and markets have re-priced for that risk in a positive manner, underscoring once again the need to be stoic in your disposition when it comes to the allocation of an objective driven investment initiative.

Sometimes, things aren’t always as they seem, and navigating through the noise of sensationalism can feel like walking through a fun house of mirrors. Within this video, I’m offering my thoughts on the reasons behind what turned out to be the sharpest and fastest draw down that we’ve experienced in 100 years, and furthermore, why did markets recover from that drawdown so quickly as well. Were the concerns rational, or irrational?

From a tactical perspective, we remain dedicated to the goal of insulating ourselves from the sensationalism and hyperbole of the day, as we dispassionately adjust the exposures within our models, and act upon data driven conviction.

Please find a few minutes to view our monthly commentary, and please let us know if we can be of service.

YouTube Video VVVkd3dBLXV6ZGNYTXZGVmoxNUlwOHp3LmcyMkNlNjVUUWhV

Things Arent Always As They Seem 2025 IFA 1

Keystone Financial Group May 17, 2025 2:38 pm

Recent Posts

Archives

January

February

March

April

May

June

July

August

September

October

November

December

Submit Your Application Below


Skip to content
Keystone Financial
Privacy Overview

This website uses cookies so that we can provide you with the best user experience possible. Cookie information is stored in your browser and performs functions such as recognising you when you return to our website and helping our team to understand which sections of the website you find most interesting and useful.