Emotions and Money – Why Most Don’t Actually “Buy the Dips”
Weekly Commentary, March 24th, 2017
- Equity markets experienced losses across the globe this week with U.S. stocks (S&P 500) down -1.34% and international stocks (EAFE) down -0.14%.
- Fixed income markets were mixed with investment grade bonds (AGG) up 0.44% and high yield bonds (JNK) down -0.25%.
- Oil – Continues to struggle to stabilize its price with crude oil inventories now up 6.3% year-over-year while demand has only increased 0.5% in that same time frame. If supply continues to outpace demand expect to see oil prices continue to fall.
- Chinese Liquidity – The People’s Bank of China continues to inject hundreds of billions of yuan into the financial system in an attempt to help ease the liquidity drought as smaller lenders fail to make debt payments. Global economies will continue to monitor the situation as the repo market rate of 3.28% has now surpassed the yield on five-year Chinese government bonds.
- Commentary – An investor who finds themselves saying “this time is different” or “but I am different” is in a dangerous place. The reality is that markets and investors’ behaviors are far more similar to other times/people than they are different. This is a critical mindset to embrace in order to have a disciplined and repeatable process, which are particularly tested during times of market volatility.
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