The market has been EXTREMELY volatile, with 3% swings on a daily basis.
Today’s 4.22% rise in the S&P 500 has been attributed to the results of the Super Tuesday Democratic Primaries. The market prefers Slow Joe over Socialist Sanders…no surprise.
But what about COVID-19 hysteria? I’m sure that will be back tomorrow, which is why I’m just holding my positions and not trying to time the volatility.
Here’s what I told my clients today:
- During the month of February, COVID-19 has wreaked havoc on the markets. At one point the S&P 500 was down over 12%, when it bottomed on February 28. Since then volatility has been abnormally high but trending up.
- I expect this volatility to continue until the virus goes from pandemic hysteria to endemic reality.
- Unless future expectations change drastically, I intent to hold our positions through this rout. This is a similar strategy that I used during the 2018 crash, when markets plunged nearly 20% and then quickly recovered.
- I have no idea where the bottom will be, things could get a lot worse. However, LONG TERM, I see no lasting consequences to hinder consumption, therefore future corporate profits should remain strong. At current levels, the S&P 500 is at a favorable historic valuation.
- I think this is a good time to BUY, not sell.
As always, invest with CAUTION.
PS- more about politics in future articles, stay tuned.