Shorepoint believes that this is a buying opportunity and not the start of a bear market but a “normal” pullback as part of a secular bull market. Based on our assessment, we don’t anticipate a domestic recession and are adding about 5% to equities in our client accounts. However, we will first consider your cash needs, risk tolerance, etc. before increasing equities. Please read on for more details!
Below you will find a variation of the missive we sent out just before Christmas. We believe the majority of the content still pertains, but we have adjusted and added additional comments and information.
The U.S. stock market hit all-time highs on September 20th. Since that time the market (S&P 500 Index) dropped almost 15% and finished 2018 down 4.4%. During this correction, over 70% of the stocks in the S&P 500 Index were down over 20% (traditional bear market territory) and the average stock was down 29%. Domestic mid-cap and small-cap indices finished down over 11% for the year while international, developed and emerging market, were down over 13%. Bonds slightly rebounded in fourth quarter with major indices barely in positive territory for the year.