Uncertainty - August 14, 2019
Oxford defines uncertainty as “not completely confident or sure of something.”
There is always some degree of uncertainty for stocks.
- Stocks have a long-term upward bias, but no one can guarantee where a major market index like the Dow1 will be one year from today.
Investor sentiment is sometimes driven by what I call “heightened uncertainty.” In other words, the number of potential economic outcomes increases.
- These potential outcomes are usually to the downside.
Geopolitical issues, such as unrest in Hong Kong, can influence sentiment. Or, how might the U.S./China trade war affect the economy?
- The additional scenarios create heightened uncertainty and market volatility, as investors attempt to price in how rising trade tensions may affect the economy and corporate profits.
A well-crafted financial is designed to help you reach your financial goals. While risk can’t be eliminated, concrete steps can be taken to manage risk and reduce volatility.
If you have a comprehensive financial plan that has you on the path toward your financial goals, you are to be congratulated.
You have chosen the narrow path.