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Is the Roller Coaster Stock Market the New Normal?

Who said this? “Yahoo, I’m rich!” “Was it Warren Buffet?“ Nope, try another one. Who said this? “I may live under a bridge.” “An unfortunate victim of life’s circumstances?” Actually, these were trick questions. It’s the same man, going through roller coaster highs and lows his stock investments have taken over the last few months. Up 611! Down 789! Up 344 during the morning, but losing it all, plus 124 points after lunch! Bring on the Dramamine.

In fact, this roller coaster market has made some investors run for high ground. Are they the smart ones? Is this our nationwide financial future? Or, do we have reasons for quiet confidence? Will it, in fact, work itself out going forward? Today, Money Examiners looks to the gyrating market with a view toward the future. We also asked a money expert about his ideas. Let’s see what we discovered.

Remember when we counted on the Dow Jones Index to rise gently upward? Yes, actually, that was only six months back. The thing is, that WAS remarkable. Last year’s soft ride was unprecedented. But, 2017’s gentle climb had an impact. It made investors soft. This year, when things jump around a bit, our internal investment instincts cry for help.

“I don’t think I’m soft, but big swings like this aren’t normal. In 2017, the Standard and Poor’s 500 moved two percent or more…never! That’s occurred six times in 2018. Three times up, and three times down. One day the index fell 2.2% That was one day!

There’s more! There were eight days last year in which the S&P rose or fell by one percent. In 2018, those stocks have moved one percent 23 times. The markets are the most volatile they’ve been since the 2008 meltdown. Tell me I shouldn’t panic!”

You should absolutely not panic. Unlike 2008, this economy is in pretty good shape. Markets aren’t far off from how they began this year. The both-direction wild moves leave the Standard and Poor’s index down about 3.4% for 2018. With the Dow down less than 4.5%.”

Charles Fischer
Charles Fischer

Last year’s tranquility was an anomaly! Some investors believe volatility is not the norm. Actually, it’s more the norm than you believe. This is what Mr. Charles Fischer had to say. He is among the top financial guys out west, a registered rep with Tampa, Florida’s firm of Calton and Associates. Charles Fischer advises some top earners out of his offices in Eugene, OR.

“…the markets dropping and rising like they have recently is more the norm than not…Typically you have (on average) one or two 5% drops in a year, along with one 10% drop each year; once every three years you have a decline of 20% or more, so when these things happen—it is not a surprise but expected when investors have the right attitude.”

So, does Mr. Fischer think we ought to believe nothing about what’s happening now should give us reason to wonder? No, that’s not the whole story, either. The Trump Administration might be riding the right financial train track, but the mode of communication is truly odd. Governing by the middle of the night tweet is unprecedented. Charles Fischer said some things about that, as well.

” …volatility is common, but the reason for the current volatility is not. Eventually, the marketplace will {adjust} to “the latest” daily proclamation from Trump, and react less. But again—this is a lot to absorb that the markets have never heard before, and the list of new assertions from the White House emerging over the last four months is quite a long line of “never been heard” by a US President. So in the process of him trying to solve things—it creates volatility. But I personally do believe we are headed in the right direction. In my belief—barring a trade war with China, or a real war with North Korea or Syria—the US stock market is in for a big BOOM yet.”

So, hang tight, boys and girls. The coaster ride might have just started. Watch the international war sabers. So long as no one starts slinging them around, the economy may well do fine.