Stock markets seem to have swung from extreme pessimism to extreme optimism as the stock rebound extended in February.
U.S. markets led the way. The S&P 500 Index gained 3.2%, Dow Jones Industrial Average 3.9%, and the small-cap Russell 2000 surged 5.2%.
They say a rising tide lifts all boats, and foreign developed markets also gained with the MSCI EAFE Index up 2.5% in February. However, emerging markets were less fortunate: the MSCI Emerging Markets Index fell -1.5%.
Can it last?
The 2019 rally has been relentless so far, yet there’s still a lot of uncertainty, particularly as growth slows both here and abroad. The U.S. trade disagreement with China remains unresolved and there’s evidence that the Fed may delay normalizing rates.
Given escalating global tensions and slowing growth, it seems prudent to be cautious about adding additional risk to your portfolio. It also helps to keep a long-term perspective and adhere to a disciplined asset allocation and investment strategy that can help you weather turbulence.
Recognize that uncertainty and volatility may be with us for a while, just as they have been for most of the 50 years that we have been managing accounts for clients, and it helps to have a plan in place that can help you move forward.