We wanted to reach out to you today to let you know that your accounts are in good hands. It is important to remind you that corrections are a natural and a common occurrence in the stock market, what really matters is the underlying fundamentals of the United States economy and the greater world. While we are concerned about several major issues that you see in the news today, like the slowdown in the global economy, the Chinese economic issues, rapidly dropping oil prices, not to mention the problems in the Middle East and Russia, these issues are exacerbating the fear and anxiety that is driving this market at the moment.
It is important though, to put everything in historical perspective. As with any bear market that we’ve seen, there is always some major catalyst that caused it. In the last 15 years we’ve seen two bear markets that were predicated by: one, September 11th and an enormous loss of life and confidence in our system during that period of time, and two, during the banking and financial crisis of 2008. We see no parallels to those times to the times of today. In fact, what we see is a pretty good economy here in the United States. We have improving employment, good consumer spending, improving housing and auto markets and very low interest rates. With that in mind, it is not uncommon for the market to go through corrective periods like what we’re seeing today. As investors, we see such instances as opportunities to get into assets that might have been overpriced a short time ago, or simply picking up some of our favorite investments at a cheaper price.
The market has given back most of its gains for the year, The S&P is down around 8% from the highs on July 20th, all within the range of what corrections have been historically. Nobody can say with certainty when this will end, but we feel that the market will rebound sooner rather than later and remain bullish in our views and perspective. You are in good hands and rest assured that we are reviewing our positions constantly and will be taking prompt action, should we feel the need to.
Please feel free to give your advisor a call or email if you have any further concerns. But trust us, America is in a good place right now, especially relative to our allies around the world, and we feel that when this period of time passes as it always does, there will be great opportunities to get into the market and to profit over the next twelve months and over the long term.
President and CEO
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which course of action may be appropriate for you, consult your financial advisor. No strategy assures success or protects against loss.
Gerber Kawasaki, 2716 Ocean Park Blvd. #2022 Santa Monica, CA 90405. Contact us at (310) 441-9393.