Market Volatility Is a Normal Feature of Long-Term Investing

Review the latest Weekly Headings by CIO Larry Adam.

Key Takeaways

  • Over optimism flagged near-term pullback
  • Volatility is a normal feature of long-term investing
  • Pockets of weakness are not overly concerning

Keep Calm and Carry On! The recent burst of volatility after a prolonged period of calm has captured the market’s attention and temporarily halted the S&P 500’s recent winning streak. While market gyrations can be concerning, remember not to panic – pullbacks and interim spikes in volatility are quite common. Below we put the recent market movements in perspective, which have been driven by time (it has been a while since we had a 5%+ pullback), overly optimistic, complacent market sentiment, and higher Treasury yields amid persistent inflationary pressures and signs of a more patient Fed. However, we reiterate our positive long-term view and suggest using periods of weakness opportunistically.