Stock market volatility par for the financial course – The News Journal
Published: Saturday, April 4, 2015 at 5:30 a.m.
Last Modified: Saturday, April 4, 2015 at 9:27 a.m.
With the nation’s equities markets roiling with volatility these days, some investors are getting nervous. Fueling those concerns are the prospect of an increase in interest rates, sluggish gross domestic product growth and global concerns from the Eurozone to the Middle East. But the view from Main Street is often different from perceptions on Wall Street. To get an idea of what investors might expect to see in the coming months, David Fowler, president of Alliance Financial Partners in Palm Coast, offers the local spin.
The markets have been more volatile lately. Should investors be worried about a downward trend?
I would say that its hard to say exactly when investors should be worried about a downturn. We’re six years into a bull market and statistically speaking, it is inevitable that a downturn is going to happen. Whether it is this month, this year or next year, nobody knows. We’re due for a down years, but as far as the gravity of that, we don’t know.
How much of an effect is the prospect of an interest-rate hike having on equity markets?
The think to some degree interest rates are affecting market volatility. But over the long term, the market is still going to do what it is going to do. An interest-rate hike is going to affect the bond market significantly more than than the Dow Jones Industrial Average or the S&P 500. In the short term, the market goes up and down, but over the long term, it goes up.
Fourth-quarter GDP was a modest 2.2 percent, but consumer spending was strong. Are fears that the economic recovery could be losing steam influencing investors?
I can’t speak for the country as a whole, but for business here in this county and what we are seeing, as usual, the businesses I talk to seem to be better and better every time I talk to them. More homes are being built, Realtors are busier then they have been in a long time and restaurants and small-business owners are busier then they have been in years. From a business standpoint, there is increased confidence in where the economy is going.
What is your overall outlook for the stock market for the rest of 2015?
The short answer is I’m not sure what it will do for the rest of the year. Investors with a one-year plan should thing about volatility and plan for that. Investors with a 20-year plan should make sure they are properly allocated for a long-term plan and may want to consider the impact interest rates may have on their bond holdings and be ready for the impact that it is going to have.
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Stock market volatility par for the financial course – The News Journal
