Stealth Correction

You may not have noticed this by watching the major stock indices, but the median stock is down 13 percent over the past few weeks. This is important because those worrying about a correction have missed the fact that we have already had one. Could it continue? Of course, it can, but much has already been done.

During this slide, investors have rotated out of growth, high-growth, and cycle stocks into staples, healthcare, and other stocks considered more immune from an economic downturn. Another tell-tale sign that investors are concerned for our economy is that the 10-year treasury yield has declined from over 4.6 percent to under 4.3 percent. This is not a huge move, but it does reinforce the notion that there are increasing doubts about economic growth.

With looming tariffs and other proposed policy changes by our Federal Government on the horizon, it is understandable that businessmen, investors, and consumers are all taking a pause to see what emerges. Perhaps it will be much less than feared, or the economic impact may not be too bad. The markets may have already priced in much of this. We will see. The Bull and his partners manage diversified portfolios to mitigate just such concerns. In the meantime, stay steady my friends. Worrying about a decline when one has already happened is not productive!

-The Lonely Bull