Still Rolling
This year, the U.S. stock market has gone through a series of rolling corrections. For the past month, we have been experiencing another. A rolling correction is one that sells-off some of the most recent winners that may have exceeded reasonable expectations. Of course, this is a difficult metric to judge, but one can also see it as opportunistic profit taking. In other instances, news may prompt a reassessment of previous optimism.
In addition to correcting an irregular advance, investors have been lurching between hope for a speedy and robust economic recovery and concern that this may be curtailed by a number of factors, such as the emergence of the Delta variant of the coronavirus. So, in the first instance, value stocks lead the market, then these fall back as investors return to betting on the consistency of growth issues.
Fortunately, despite the back and forth, both categories have made significant progress posting excellent returns. The market is now in a particularly messy period. There is much to worry about. However, the economy has substantially recovered, businesses are making record profits, and money is still cheap. Messy periods are a part of life, usually things sort themselves out and everyone moves on. Stay steady my friends.
The Lonely Bull
