Time in the market is better than timing the market.
The world markets gesticulated wildly last week (Feb 5-9). 1,000 point swings in the Dow and 50 point swings in the S&P were a daily occurrence (sometime multiple swings in one day).
Volatility and uncertainty was rampant and it seemed like every other talking head was sure of either one of two things:
- This is only a minor hiccup in a historic bull market run. Nothing is wrong with the fundamentals.
- This is the start of a market correction of 10-20% from the highs seen early this year (i.e. January 2018).
It seems to me that no one really knows why the markets were swinging wildly. Some point to increased rates (the most likely cause), while other pointed out the inverse VIX ETF collapsing. Some bullish pundits questioned whether the significant drops were an overreaction given the strong economy and corporate earnings seen in the subsequent weeks. Perhaps investors were taking the solid gains received in 2017.