RESPONDING TO FALLING EQUITY PRICES
The recent market pull back has the S&P 500 off 6.91% from top to bottom, yet the broad U.S. stock index remains higher by 2.05% for 2018.
Rising long-term interest rates has increased corporate borrowing costs, and indicate a U.S. recession may be looming. Additionally, corporate profit margins for U.S. large companies have set new highs in 2018, making a 2019 repeat performance more difficult, particularly as the U.S. economy runs into capacity constraints with unemployment at 3.7% - the lowest since 1969.
If equity prices continue to decline, we stand ready to re-balance your overall portfolio. Re-balancing into corrections can mean enhancing long-term portfolio results and better funding your goals. Such an opportunity is infrequent and brief. Stock market corrections occur, on average, about every 8 to 12 months and, on average, last about 54 days.
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