Briefly, let’s look at each of these.
The fear of slowing corporate profits causes market declines. PPG reported weaker profits due to a combination of higher raw material costs from tariffs and reduced demand for its products in anticipation of an economic slowdown.
The fear of political uncertainty caused by the upcoming midterm elections and the future stories we create about which party will win control over either the House of Representatives or the Senate or both.
The fear of past market events that leave an embodied memory of doom cause repeated events. In the month of October, we often see noteworthy drops in equity prices. The 1987 market decline began October 19th and the 2008 market decline started September 28th.
The forces that helped create the rising equity markets, economic growth,
relatively low interest rates, fiscal stimulus and business deregulation continue to exist.
Negative factors to recognize: 1) the US continues to lack trade consensus with China 2) the presence of political uncertainty due to midterm elections 3) the rising interest rate environment. 4) The slowing pace of US and World economic activity.
We cannot predict whether the DOW and other equity markets will drop further before starting to rise; but we do know the DOW and other equity markets will rise again, if history over the past hundred plus years is any indication. Most important, as we maintain without doubt, continuing to view and manage your investment plan in relation to the goals of your life that matter most, is the surest way to continue to sustain and grow your wealthy life. With over 30 years of serving you in the financial planning profession, we are steadfast and stable in this truth.