In short, we think that the current market cycle is reflective of positive global economic growth that can continue for years.
3) HAVE A PLAN
Markets can seem extremely volatile day-to-day, and that volatility can contribute to behavioral errors. Investors should be prepared ahead of time for these events. The good news is that current economic fundamentals look solid and global central banks remain accommodative. Assuming the current fundamentals hold, we think long-term investors should add to their equity allocation during normal market volatility and corrections. The most important thing is to have a process and a plan in place for dealing with volatile markets, which is an area that a financial advisor may help provide perspective. On occasion, it may make sense to raise cash, but it must be done with forethought and according to a well-defined process. We think investors should have a plan in cases of emergency, such as our Cash Indicator, that may alert investors that market fundamentals are breaking down and the best course of action might be to temporarily step aside.
This article was written by Gary Stringer, CIO, Kim Escue, Senior Portfolio Manager, and Chad Keller, COO and CCO at Stringer Asset Management, a participant in the ETF Strategist Channel.
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