During the past week, we have seen some wild swings in the market. A number of factors have likely contributed to this spike in volatility, including:
- We are long overdue for a market correction.
- Investors are concerned that an increase in inflation could lead the Federal Reserve to raise interest rates faster than expected.
- Electronic trading by ETFs and institutions flooded the market and heightened the volatility.
Given the unusually low volatility in the market over the past couple of years, a sharp pullback can be a little unnerving to investors. However, rest assured that corrections such as this one are a natural part of the long-term investment cycle. We believe that our long-term investment strategies are sound and that you should continue to stay the course.
Robert L. Souza, CFA
Gamble Jones Capital Management