Rewards came to patient investors for staying the course through the disappointing performance of stock markets at the end of last year. Given strong employment and steady growth from the economy and an accommodating Federal Reserve, it was something of a foregone conclusion that the markets would eventually come back.

But our expectations can never be completely positive. While the stock market’s increase was giving an “all clear” for more growth, the bond market was giving a signal of “slow down”. These opposing views have some short-term bettors taking money out of the stock market as a cautionary measure. We know that the market will drop again, that is a given. However, when trying to time these moves, we would have to be right twice, knowing both when to pull out as well as when to reinvest. In a world as complex as ours, there are too many variables to confidently hit both of those times accurately.

The economy is still growing and the Federal Reserve still has an accommodative policy. There has even been talk that U.S. economy may avert a recession in the next couple of years and continue on the rather slow growth pace it established after the financial crisis 10 years ago.

While we’ve enjoyed a nice turnaround, we shouldn’t become too comfortable. We still live in an uncertain world that will always struggle with change. Having a well-diversified portfolio with the right allocations to stocks, bonds, and real estate, while staying invested, is still the best alternative to meet your financial goals.

Thank you for the trust you have placed in Vista.

Your Vista Wealth Management Team

Source of all charts and data: Morningstar Direct
Economic data is from BCA Research, Dow Jones, and The Economist Newspaper Limited.

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