First Quarter Market Update - 2018

Quinn Waddington - Apr 03, 2018
Volatile was the most used description of the markets in the first three months of 2018.  It was just three months ago when the markets started the year strong.  The S&P500 (US markets) had the best January since 1997 and the rest of the global

Volatile was the most used description of the markets in the first three months of 2018.  It was just three months ago when the markets started the year strong.  The S&P500 (US markets) had the best January since 1997 and the rest of the global markets seemed to follow along.

 

Unfortunately, the beginning of February delivered the complete opposite and the first market correction (drop of -10%) since early 2016.  Almost as quickly as the markets dropped, they bounced back up and we were trading near all-time highs again in early March.  That short positive trend also didn’t last long as the end of March was largely negative and we are now back near correction category.

 

The problem with the volatility of these market moves was the lack of substantial reasoning for such significant swings. In my opinion, this volatility had much more to do with sentiment and the “follow the heard” mentality of investors. Fear of missing out when the markets are moving higher quickly and panic selling when the markets are dropping.  This emotional investing is the exact reason many people lose money in the markets.  It leads investors into the strategy of buying high and selling low, which of course is the opposite of a sound strategy.

 

I will be putting out a post about my favourite strategy to combat that emotional investing but if you’d like more information in the meantime, let me know.

 

quinn.waddington@canaccord.com or (604) 699-0874

 

As for what to expect in the rest of 2018, likely more volatility, but there is more room for growth as the global economies continue to recover. There is lots of “noise” in the news and it is very difficult to know what to listen to and what to tune out so if you ever have questions about the latest tweet from the leader of the U.S. just give me a call.