During times of increased volatility in the stock market you often see a great deal of disparity among investment managers in terms of their performance. For example, the market may have recently made new lows and you may have a manager who remains bearish and then the market rallies higher. They then generally reverse their thought process and take a bullish view sometimes buying near the end of the rally. However, as I mentioned before in a previous post, “Markets can remain irrational longer than you and I can remain solvent.” So, sometimes if there are enough managers that may have missed a possible rally in the market they can in essence create a continued buying spree that lasts a lot longer than one may think.
On the flip side, if you have missed the rally and then buy in at the top the short-term volatility can be hazardous to long-term performance. For this reason, it is very important to monitor your long-term performance with your financial planner to make sure your goals and objectives are still in line.
As a reminder past performance is no guarantee of future results.
Eric Marvin, CFP®, CRPC®-Financial Advisor
JPT102411-1696
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