S&p 500 Earnings Update & Economic Data Review - Sunday, March 7

I’m not convinced the correction is over just yet. If I had to guess, I think this correction will fall within the 8% to 12% range (on the S&P 500) before the uptrend will resume. Who knows. Clearly higher rates will affect each area of the market differently. Investors have a couple options:

  1. If this correction has you nervous, you’ve probably taken on more risk than you can tolerate. The good news is the 10 year treasury rate is about the same as the S&P 500 dividend yield right now. So from an income standpoint, you can now take some risk off the table while maintaining about the same level of income.
  2. If you have more cash than you’d prefer (currently yielding next to nothing), you can use this pullback to buy stocks on sale. This may also be a good time to assess your level of diversification too. If your portfolio consists of only large cap growth (tech) stocks, consider using this time to get exposure to value, small cap, international stocks as well. Diversification isn’t fun and exciting, and it basically means you’ll always be holding some assets that are underperforming, but its the best way to weather the inevitable storms and reduce your risk of permanent loss.

Next week we have the NFIB small business optimism report, and Wednesday morning the CPI reading on inflation (which could have a direct effect on bond yields). Q4 earnings are pretty much over but we have three S&P 500 companies reporting. I’ll be paying attention to Mongo DB (MDB) on Tuesday and Docusign (DOCU) on Thursday.

1 2 3 4
View single page >> |

Disclaimer: None.

How did you like this article? Let us know so we can better customize your reading experience.

Comments

Leave a comment to automatically be entered into our contest to win a free Echo Show.