An Unexpected Start to 2020 – January 8, 2020
Since October 8, 2019, the S&P 500 Index2 is up nearly 13% through its latest high on January 2 (St. Louis Federal Reserve).
- That’s an astounding run over a very short period.
- Perfection can get priced into the market, and unexpected events may create a reason for short-term traders to take profits.
On Friday, investors reacted to an unexpected geopolitical event.
- The U.S. military killed an Iranian general, creating fears of a much wider conflict.
Thus far, reaction in the market has been muted.
- Neither side wants a full-blown war, and investors have responded cautiously. Yet, the situation remains fluid and miscalculations by either side are possible.
Investor’s corner
Geopolitical anxieties have seldom had a long-term impact on stocks, as overseas tensions rarely have an economic impact at home.
There are a wide variety of potential outcomes in the Middle East, and an increase in market uncertainty in the days ahead is a possibility.
For investors, a holistic financial plan that includes a well-balanced, diversified portfolio, which takes market missteps into account, has historically been the best path towards one’s financial goals.
Created 2020-01-08 15:36:12
