![]() Tax Loss Harvesting – Big dislocations in the market create opportunities to rebalance and to harvest tax losses – two things that BDF pays particular attention to in the management of your portfolio.As I stated earlier, investors who remain disciplined in the face of market volatility are rewarded. And while it is unfortunate to see temporary restrictions on travel to/from several southern African countries (especially for an avid traveler to Africa such as myself), for US air carriers at least, those destinations account for very few of their routes. Those two variables are still at play as we head full-on into the holiday shopping season. The unleashing of pent-up consumer demand led to strong GDP growth and fantastic corporate earnings, pushing stocks higher. When the Delta variant was discovered in India earlier this year and soon spread worldwide, the economy and markets generally shrugged off the news and continued to steam ahead. As for its impact on the economy and the markets, that too remains to be seen. Should you be concerned about the Omicron variant? I’ll leave that to the scientific and medical experts to determine. Compare that to Black Monday (October 19, 1987), when the Dow dropped 508 points that day – a percentage decline of a whopping 22.6%! Markets have come a long way since then. The percentage drop in the Dow that day was a mere 2.5%. In fact, the weekend Wall Street Journal’s front-page headline read, “Dow Suffers Worst Day of 2021.” But let’s put things in perspective. When the Dow dropped 905 points the day after Thanksgiving, it was the worst day for the index this year. But the fact is that markets have always recovered and always rewarded those who remained in their seats. And when you’re in the thick of the decline, it’s easy to believe there is no end in sight. When markets drop, whether it be for a day or weeks on end, it can feel scary. Even going back to the early days of the pandemic in spring 2020, after stocks fell 30-40% in a five-week span and the world seemed to be teetering on a precipice, markets recovered just about as quickly as they declined.īy citing these examples, I don’t mean to sound flippant about this latest bout of market volatility. ![]() And each time, stocks rebounded and soon reached new highs. Each time stocks plunged, it was for a different reason – the Delta variant, rising inflation, liquidity concerns about Evergrande (the large Chinese real estate company). ![]() In 2021, there have been several days of big drops in the market even though stocks have enjoyed a fabulous year. If this sounds eerily familiar, like déjà vu perhaps, it’s because it is. ![]() The discovery in South Africa of a new Coronavirus strain called Omicron caused stocks, oil prices, and Treasury yields to fall over concerns that travel restrictions and potential new shutdowns could slow the recovery of the global economy. The late New York Yankees catcher Yogi Berra was known for his non-sensical quotes, or “Yogi-isms.” One of which, “It’s like déjà vu all over again,” seems an altogether appropriate way to describe the most recent stretch in the market. ![]()
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