December 2018 Market Update


November was a very interesting month. After a terribly bad October, November started gaining great guns. The Dow climbed from 25116 at the end of October up to 26191 by November the 8th. Then by the 23rd, the Dow had given up over 1900 points (-7.27%) to 24286. Now it has come back up to 25538 at the end of November. For the month the Dow gained 1.68%, the S&P 500 was up 1.77% to 2760, the NASDAQ was only up 25 to 7331, and the Russell 2000 (small cap stocks) was up a little less than 1.5% to finish at 1533. 2018 will go down as a year that the market became more volatile. We’ve had a four or five year run in which the market was relatively calm and just kept climbing. So far this year, we’ve already seen two corrections of 10% or more, but the market is still higher than it was at the beginning of the year. That means that it has seen some pretty good runs, too. This last month of the year is going to be all-telling. Will we see a double-digit gain for any of the indexes we follow, or will we see another correction and wind up in negative territory once we get to December 31st and the fat lady has belted out her final song of the year? We don’t know. We do know, however, that if this volatility turns into the long-awaited bear, the portfolios we manage are well-positioned to take advantage of it.

We know that any time the news media reports a down market for the day, and it continues for any amount of time, many of us will become concerned that our hard-earned nest-egg will melt clean away. I can’t say that I wouldn’t be concerned as well. But just be assured that we have built our portfolios to be able to come through these bears with as little damage as possible. We manage for risk first, and growth second. So don’t consider any news of the market falling out of bed as necessarily a bad thing. Hang in there. The best is yet to come.

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