Keeping your focus in a shape-shifting market

By Covestor

Since November of 2014, the S&P 500 Index has traded in a tight range of approximately 1970 to 2030–that is, until the middle of August.

Rather abruptly, the tranquility disappeared and volatility came roaring back.

Continue Reading Below

There were concerns over a slowing China, emerging markets instability and the possibility the US Federal Reserve could raise rate.

Guessing Game

However, these things didn’t just come out of nowhere to suddenly catch the market by surprise.

There has been the talk of a Fed rate hike now for quite sometime.

China’s GDP growth rate has consistently been declining since 2010.

Emerging market softening is nothing new: Countries like Brazil have seen slowing since 2014.

Mood Swing

October arrived and it was as if all these fears disappeared overnight. The market moved up just as quickly as it moved down.

What changed? Basically nothing.

The market pays attention to what it wants to.

In the first half of the year everything was about Greece. Did Greece just suddenly disappear? No.

Invest with Care

Unfortunately, in today’s fickle environment you have to be extra careful in selecting investments.

You really need to understand what your company does and how the changing environment can affect your investment.

You need to think logically and not get caught up in the market and media excitement.

Long Game

Market sentiment shifts to extremes: As of October 29, the S&P 500 Index is right back in the middle of the range I mentioned earlier, right around 2090.

Will the market go higher or lower? I’m not sure.

I do know that looking at my All Cap Growth Investment portfolio I am comfortable with my positions should the market move in either direction.

I have a long-term view and I buy my investments with the same idea.

Understand what you are up against and be prepared. That is all you can do in this type of environment.

I am fairly certain that in another month or so the market will be focused on something new.

Photo Credit: Karl-Ludwig Poggemann via Flickr Creative Commons//

Subscribe to our once-weekly email newsletter and get the best posts delivered to you in one convenient place, to browse at your leisure://

The post Keeping your focus in a shape-shifting market appeared first on Smarter InvestingCovestor Ltd. is a registered investment advisor. Covestor licenses investment strategies from its Model Managers to establish investment models. The commentary here is provided as general and impersonal information and should not be construed as recommendations or advice. Information from Model Managers and third-party sources deemed to be reliable but not guaranteed. Past performance is no guarantee of future results. Transaction histories for Covestor models available upon request. Additional important disclosures available at http://site.covestor.com/help/disclosures.