The momentum from Q1 carried into April as many broad asset classes had positive returns. But as US trade talks with China ended in early May without a deal being reached*, stock markets turned negative for the quarter. The see-saw quarter would end on a high note for stocks globally, recovering all losses incurred in May, as the Federal Reserve hinted that interest rate cuts could be implemented later this year** and trade talks between the U.S. and China resumed.
As the US stock market reached an all high, and the yield curve remains inverted, the chorus of ‘doomsday’ predictions may seem to grow louder. I would like to share my periodic reminder about how dangerous knee-jerk reacting to some of the financial headlines can be. Fear sells, so negative headlines are usually not hard to find. And many of the publications that produce such headlines come from seemingly reputable sources. But these articles seldom pan out and can cause undue stress.
Attempting to outguess the market and predict the next crash is very difficult to do. Imagine if you had followed the advice of one of numerous posts in 2012 predicting a devastating market crash. You could have missed out on one of the greatest bull runs in history. This is just one example of how predictions don’t always come true.
If you have any questions or concerns about the current markets, your financial advisor can help provide the right context to help ensure you stay on the right course.