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2 weeks ago

How Can Charlie Brown Help Investors?

INTERESTING

“In the book of life, the answers aren’t in the back.” – Charlie Brown

Markets are not easy to navigate, as fear and greed can often get in the way of prudent investment decisions. As much as we would like a script to follow, it isn’t that simple. Much like the quote from Charlie Brown on life, there is no clear answer as to how markets will bottom.

“You can have V-bottoms, W-bottoms, or U-bottoms, for instance; but it appears more likely that this particular bottom may look like a Charlie Brown shirt instead of a letter of the alphabet,” exclaimed Ryan Detrick, Senior Market Strategist. As far as a potential market bottom is concerned, the chart of the day illustrates our belief that we appear to be beyond the alphabet and into Charlie Brown territory:

The last time we saw Charlie Brown-esque volatility like this was in August 2015, and the S&P 500 Index didn’t bottom until February 2016—nearly six months later. The good news is the economic backdrop is much better now than it was then, so we do not expect another four months to pass before the lows are established.

For more of our thoughts on why we believe the economy is on firm footing, be sure to read our recent Weekly Market Commentary focusing on earnings and our recent Weekly Economic Commentary focusing on the employment picture.

IMPORTANT DISCLOSURES

Investing in stock includes numerous specific risks including: the fluctuation of dividend, loss of principal and potential illiquidity of the investment in a falling market.

The S&P 500 Index is a capitalization-weighted index of 500 stocks designed to measure performance of the broad domestic economy through changes in the aggregate market value of 500 stocks representing all major industries.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual security. To determine which investment(s) may be appropriate for you, consult your financial advisor prior to investing. The economic forecasts set forth in this material may not develop as predicted.

All indexes are unmanaged and cannot be invested into directly. Unmanaged index returns do not reflect fees, expenses, or sales charges. Index performance is not indicative of the performance of any investment. All performance referenced is historical and is no guarantee of future results.

Investing involves risks including possible loss of principal. No investment strategy or risk management technique can guarantee return or eliminate risk in all market environments.

This research material has been prepared by LPL Financial LLC.

To the extent you are receiving investment advice from a separately registered independent investment advisor, please note that LPL Financial LLC is not an affiliate of and makes no representation with respect to such entity.

The investment products sold through LPL Financial are not insured deposits and are not FDIC/NCUA insured.  These products are not Bank/Credit Union obligations and are not endorsed, recommended or guaranteed by any Bank/Credit Union or any government agency.  The value of the investment may fluctuate, the return on the investment is not guaranteed, and loss of principal is possible.

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2 weeks ago
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