Volatility Storm?

Is a volatility storm coming? More and more divergences have developed within the stock market. This is an ominous sign that one could be nearby. However, remember, volatility can be to the upside too, not just down. Nevertheless, volatility is a price an equity investor must pay to earn the far better returns over fixed income. It is normal and has always been a part of investing. Just think of the year so far. It started with optimism, collapsed under the pandemic, then rose again with government support. Markets also weathered the Presidential election and its aftermath and now anticipate the economic benefits from mass vaccinations; what a year!

Now that 2020 is almost history, we all look forward to 2021. We believe it will be good, but certainty is not ever assured. Interest rates are low and should remain so, the Federal Reserve has said as much. More government stimulus looks increasingly likely. Businesses that have been thriving are well positioned to continue. Medical solutions for this virus are on the way. There may be more surprises, but they need not all be negative. The Bull and his partners feel comfortable with their strategies. They are never short-term anyway. Stay steady my friends.

The Lonely Bull