• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar
  • Home
  • News
  • Classifieds
  • Financial
  • Food
  • Life & Culture
  • Politics
  • Vent Line
  • Contact

The Genesee Journal

Mid-Michigan Living

Market Update: The Correction that was Due?

Market Update: The Correction that was Due?

January 26, 2022 by Financial Strategies Group Leave a Comment

Once every 18 months. That is how often the S&P 500 drops 10%, also known as a “correction”. We all remember the last correction (also commonly referred to as a “crash”), which happened in March of 2020. But what you may not remember is how long it took for the market to recover from that crash. The market took less than 5 months to rebound, bouncing back in August 2020.  That was an enormously quick turnaround. August of 2020 was 18 months ago, and guess what we have not had in 18 months? That’s right, a correction!

 

The market is not sentient and certainly doesn’t know that it was due for a correction, but the participants in the market are sentient and also emotional. The slight majority of those participants have, for various reasons, decided the market was overvalued and have sold in recent weeks. This selling has outpaced buying and that is how a correction unfolds every time. Currently, the S&P 500 is down 8.97% as of close on 1/25.

 

 

An interesting note is that, despite the fact that the S&P has not closed more than 10% down during trading, on 1/24 it was down as much as 5%, which put it well into correction territory.

 

In my last market update just two short weeks ago, I explained that this year could prove to be difficult for growth stocks as the Fed tries to combat inflation. Furthermore, I expressed that this could be good for value and international stocks. We have been a bit underweight growth stocks and have a healthy exposure to both international and value stocks. The market as of recently appears to agree with that sentiment as growth stocks have taken the brunt of this correction compared to value and international. We expect that growth will continue to face more headwinds than other stock categories. The chart below illustrates the contrast between these categories during this correction period.

 

 

So, is FSG doing anything during these turbulent times? In general, our portfolios have been tilted slightly conservative as our data has suggested that the market was overvalued and presented a dislocated risk/return prospect. We are now trimming some of our conservative positions and buying value tilted stocks via ETFs and Mutual Funds. You may see these transactions via trade confirmations. Please note that the above changes are what those trade confirmations are referring to.

 

Your advisor can of course provide more specific information relative to the changes made in your accounts if you have questions. As your financial firm, we strive to not only do the best possible job we can for you, but also keep you informed with what our thoughts, plans, and actions are. We are an open book and encourage you to reach out if you have any questions or concerns.

This commentary on this website reflects the personal opinions, viewpoints, and analyses of the Financial Strategies Group, Inc employees providing such comments, and should not be regarded as a description of advisory services provided by Financial Strategies Group, Inc or performance returns of any Financial Strategies Group, Inc Investments client. The views reflected in the commentary are subject to change at any time without notice. Nothing on this website constitutes investment advice, performance data, or any recommendation that any particular security, portfolio of securities, transaction, or investment strategy is suitable for any specific person. Any mention of a particular security and related performance data is not a recommendation to buy or sell that security. Financial Strategies Group, Inc manages its clients’ accounts using a variety of investment techniques and strategies, which are not necessarily discussed in the commentary. Investments in securities involve the risk of loss. Past performance is no guarantee of future results.

Written by Brice Carter

Filed Under: Financial

About Financial Strategies Group

Financial Strategies Group, Inc. is a Registered Investment Adviser in Flint, MI. We believe in bringing you peace of mind through a confidence that you are protected and prepared for your financial future.

Reader Interactions

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Recipe Rating




Primary Sidebar

Culvers on Miller Rd

Recent Ventlines

  • Eric Martin said Has anyone else heard about the whole Putin has cancer dilem...
  • Justin Drover said Biden just signed into our Law the same Sex marriage bill.
  • Eric Martin said Alot more viruses are literally being dug up from the Artic...
  • Jennifer Hill said Biden seems to have forgotten about Chinas atrocities and on...
  • Jennifer Hill said Trumps Twitter is live and he already has 80 Million followe...
  • Chris Grove said Who knew it had to be a Billionaire with a sense of justice...
  • Eric Martin said Who’s still looking forward for the 2024 Presidential...
  • Chris Bane said This Midterm election will make or break this country and po...
  • Matthew Haze said With all that’s going on in the world should we really...
  • Stacy clover said Who’s excited for the upcoming Mid Term elections, hop...

Copyright © 2023 · GeneseeJournal.com · All Rights Reserved.