One-Day Shakeout!

Short shakeouts happen periodically in bull markets. They pass through like a quick summer squall. Afterwards, it seems as if not much happened. The stock market goes back to where it was except for a few issues that may have been the catalysts for the quick storm. That is exactly what happened this past Tuesday.

It is easy to understand how these selling bouts get started if you understand that investors with big gains get very nervous. They fear losing those gains and are quick to sell at the slightest provocation. Gains make many investors more edgy than losses. With an unrealized loss, many simply know that they are not selling until prices improve.

Fundamentals of our economy and for most companies have not recently changed. They are good! However, no market proceeds in a straight line. Valuations of good companies will recover. With all the macro issues such as the Ukraine and Israeli wars, a looming presidential election, and our unpredictable Federal Reserve and its policies, expect more bouts of volatility. This action is normal; stay steady my friends.

The Lonely Bull