While the recovery from the Monday selloff two weeks ago was impressive, we are not out of the woods for seasonally enhanced volatility. That week it was reaction to the China property developer Evergrande Group, and this past week it’s been the Washington spending bill and the debt ceiling negotiations.
From September 21st through the week after the Ides of October, we can expect greater market movement both up and down.
Remembering the October Massacres of 1978 and 1987, the October Crashette of 1989, the 1997 Asian Collapse and the Long Term Capital rescue in September of 1998, this period has provided plenty of volatility fireworks. But a funny thing happened after all these events…
The sun came up.
The markets opened.
And they moved higher.
In retrospect, all these times were great buying opportunities if you were a long-term investor.
Keep it simple and don’t over-think this market. Through fits and starts the global economy is reopening. The U.S. consumer (the biggest retail economic engine in the world) is flush with cash. The buying of goods and services has just begun.
In an effort to make better investment decisions, it’s important to replace fear and greed with context and perspective.
Relax and enjoy the seasons... (yes, THOSE seasons)!