{"id":9216,"date":"2021-01-18T06:37:08","date_gmt":"2021-01-18T06:37:08","guid":{"rendered":"https:\/\/zackspcg.com\/blog\/?p=9216"},"modified":"2022-02-26T13:05:58","modified_gmt":"2022-02-26T13:05:58","slug":"will-it-be-a-rough-winter-for-markets","status":"publish","type":"post","link":"https:\/\/zacksim.com\/blog\/will-it-be-a-rough-winter-for-markets\/","title":{"rendered":"Will it be a Rough Winter for Markets?"},"content":{"rendered":"\n<p><em>Bobby C. from Boise,\nID asks: <\/em>Good Morning Mitch, pretty much everything I\u2019ve been reading\npoints to a rough winter \u2013 for economics, the pandemic, and I think we can\npretty much all agree politics. The question is, if the economy is set up for a\nrough road in the first few months of the year, shouldn\u2019t that mean a rough\nroad for markets as well?<\/p>\n\n\n\n<p><strong>Mitch\u2019s Response:<\/strong><\/p>\n\n\n\n<p>Thanks for writing, Bobby. There is really no sugar coating\nhow challenging the winter months could be, from a public health standpoint as\nyou mention and certainly within the realm of \u2018uncertainties.\u2019<\/p>\n\n\n\n<p>Just last week, data showed that jobless claims remain\nelevated with about 750,000 Americans applying for unemployment benefits each\nweek, a number that has remained fairly steady since October. In December, U.S.\nemployers shed 140,000 jobs, the first employment decline since April 2020. The\nservices sector is also notably suffering, as the pandemic continues to\nrestrict in-person economic activity. Current economic fundamentals are by no\nmeans rosy.<sup>1<\/sup><\/p>\n\n\n\n<p>_________________________________________________________________________<\/p>\n\n\n\n<p><strong><a href=\"https:\/\/go.steadyinvestor.com\/arrow-use-volatility-to-your-advantage?source=zim&amp;medium=blog&amp;term=mitchsmailbox_zim_2021_01_14&amp;content=volatility_can_be_good_guide\">Use Market Volatility to Your Advantage!<\/a><\/strong><a href=\"https:\/\/go.steadyinvestor.com\/arrow-use-volatility-to-your-advantage?source=zim&amp;medium=blog&amp;term=mitchsmailbox_zim_2021_01_14&amp;content=volatility_can_be_good_guide\"> <br><\/a> &nbsp;<br>We may not know how the market will be affected within these next few months, but for a long-term investor, the key is to develop a strategy that can guide you through ups and downs in the market. In times like these, it\u2019s important to not get caught up in emotional decision-making. Instead, there are several positive aspects of volatility that I recommend you keep in mind.<br> &nbsp;<br>Get our insights, based on decades of experience, about how a volatile market may be able to actually help investors refine their strategies and potentially generate solid returns over time.<br> &nbsp;<br>In our guide, <em>\u201cUsing Market Volatility to Your Advantage,\u201d<\/em> you\u2019ll get our ideas on:<\/p>\n\n\n\n<ul class=\"wp-block-list\"><li>How market volatility can \u201cshake up\u201d complacent investors<\/li><li>Potential bargains that may be uncovered through turbulence<\/li><li>Why volatility may help prevent overheating and market \u201cbubbles\u201d<\/li><li>What history shows us about opportunities for steady investors in turbulent markets<\/li><li>Plus, more ways you may be able to benefit from a volatile market<\/li><\/ul>\n\n\n\n<p>If you have $500,000 or\nmore to invest, get our free guide, <em>\u201cUsing Market Volatility to Your\nAdvantage,\u201d<\/em> by clicking on the link below.<\/p>\n\n\n\n<p><strong><a href=\"https:\/\/go.steadyinvestor.com\/arrow-use-volatility-to-your-advantage?source=zim&amp;medium=blog&amp;term=mitchsmailbox_zim_2021_01_14&amp;content=volatility_can_be_good_guide\">Download Our Guide, \u201cUsing Market Volatility to Your Advantage\u201d<\/a><sup><a href=\"https:\/\/go.steadyinvestor.com\/arrow-use-volatility-to-your-advantage?source=zim&amp;medium=blog&amp;term=mitchsmailbox_zim_2021_01_14&amp;content=volatility_can_be_good_guide\">2<\/a><\/sup><\/strong><\/p>\n\n\n\n<p>_________________________________________________________________________<\/p>\n\n\n\n<p>But remember, the stock market does not really concern\nitself with in-the-moment or backward-looking data, in my view. The stock\nmarket is almost always looking <em>forward, <\/em>sometimes\n6, 12, or even 18 months into the future. As an investor, I think it is\nparamount to look forward as well, and to think about what the economy will\nlook like this fall, not this February. <\/p>\n\n\n\n<p>There are a few key fundamentals I\u2019ll point out that should\nhopefully give you a bit more optimism. First, we recently saw a new $900\nbillion fiscal stimulus package pass, which amounts to over 4% of total U.S.\nGDP. Many expected the package to be bigger, but with Democrats controlling the\nWhite House, Congress, and Senate, I think we can reasonably expect another\nround of fiscal stimulus in the not-too-distant future. Fiscal stimulus drives\nmarket support, in my view. <\/p>\n\n\n\n<p>Second, it is sometimes assumed that the pandemic has\ncrushed American households across the board. But in aggregate, American households are not struggling\nand dipping into savings\u2014<em>they are adding\nto savings<\/em>. In fact, people who can work remote, spend less, invest in the\nstock market, and hold hard assets such as real estate have actually increased\ntheir net worth during this time. Just look at how the savings deposits have\nshot higher since the pandemic hit:<\/p>\n\n\n\n<figure class=\"wp-block-image\"><img decoding=\"async\" src=\"https:\/\/zacksim.com\/blog\/wp-content\/uploads\/2022\/02\/11_pic1-1024x395.png\" alt=\"\" class=\"wp-image-9217\"\/><\/figure>\n\n\n\n<p><strong><em>Source: Federal Reserve Bank of St. Louis<sup>3<\/sup><\/em><\/strong><\/p>\n\n\n\n<p>Finally,\nthe Federal Reserve has made it fairly clear that even if we experience\ninflationary pressure later this year, they are going to keep borrowing costs\nclose to the zero bound. That creates a favorable environment for borrowers and\ninvestors, but not necessarily savers. As the old saying goes, \u201cyou can\u2019t fight\nthe Fed.\u201d<\/p>\n\n\n\n<p>At\nthe end of the day, we cannot really know if this winter and spring will be\nvolatile for markets, but for a long-term investor, that shouldn\u2019t matter. In\nmy view, long-term investors should be positioning for where the economy <em>might go, <\/em>not necessarily where it is\ntoday. And when I look out to the back half of the year and beyond, I see\ngrowth and accelerating earnings.<\/p>\n\n\n\n<p>It is important to remember that volatility is a normal part of flow of the markets. There are positive aspects to volatility that shouldn\u2019t be overlooked. The key is not to look for ways to eliminate it, but to develop a mental approach to dealing with it. <br> &nbsp;<br>Our guide, \u201cUsing Market Volatility to Your Advantage,\u201d<sup>4<\/sup>&nbsp;will provide you with insights and tips to do just that. Get answers to questions like:<\/p>\n\n\n\n<ul class=\"wp-block-list\"><li>How market volatility can \u201cshake up\u201d complacent investors<\/li><li>Potential bargains that may be uncovered through turbulence<\/li><li>Why volatility may help prevent overheating and market \u201cbubbles\u201d<\/li><li>What history shows us about opportunities for steady investors in turbulent markets<\/li><li>Plus, more ways you may be able to benefit from a volatile market<\/li><\/ul>\n\n\n\n<p>If you\nhave $500,000 or more to invest and want to get answers to the questions above,\nclick on the link below to download this guide today!<\/p>\n","protected":false},"excerpt":{"rendered":"<p>This winter will be challenging in many ways&#8230; but will the markets be in for a rough ride too?<\/p>\n","protected":false},"author":3,"featured_media":7436,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[66,71,1],"tags":[],"class_list":["post-9216","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-mitchs-mailbox","category-private-client-group","category-uncategorized"],"acf":[],"_links":{"self":[{"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/posts\/9216","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/comments?post=9216"}],"version-history":[{"count":1,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/posts\/9216\/revisions"}],"predecessor-version":[{"id":10475,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/posts\/9216\/revisions\/10475"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/"}],"wp:attachment":[{"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/media?parent=9216"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/categories?post=9216"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/tags?post=9216"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}