August is here blazing with both heat from the sun and the S&P 500 rocketing for another month in July with an upside of about 3%. That makes for five up months in a row! I guess we did get the upside surprise that I was hoping for last month. Cross your fingers for August though. When we get big runs like this, it’s bound to give some back. As much as we want to see our statements up every single month, it’s just wishful thinking. I’m expecting around a 5% pullback at some point soon. But that leads to the question of how high will we run before it pulls back? That’s where all of our risk tolerances come into play. In a typical market, we know we just need to wait out any volatility for long-term gains. Aside from that, with the market up almost 20% YTD by the end of July, I would venture to say we are happily surprised with how fast the markets have recovered so far. Even if the rest of the year was fairly uneventful, this would turn out to be an amazing year.
It will also be interesting to see what the Federal Reserve’s plan continues to be for interest rates. Unemployment is at about 3.5%, but the US economy grew better than expected in Q2. Will the Fed keep kicking up the rates to cool expansion and increase unemployment, or will they be able to get us to the “soft landing” without too much of a recession that we are hoping for. Only time will tell, but it seems like the new forecast for all of this to come to a head will be near the end of this year.
At this point in the last few years of investing, we have all seen the all-time high and a huge pullback, and then another huge run up. If you are concerned about your risk tolerance, always feel free to give us a call and set up an appointment to review. I’m always happy to do so. I’d rather have us on the same page with your risk than you worrying about whether you are in the right model.
Thank you for your continued trust in us! We are truly grateful that you are here with us.
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly.
The economic forecasts set forth in this material may not develop as predicted and there can be no guarantee that strategies promoted will be successful. All investing involves risks, including the loss of principal.