The market has experienced significant volatility thus far in 2011. The challenges have been a recovering economy faced with a Japanese natural disaster and global sovereign debt issues. Recent economic data such as the recent GDP, ISM Manufacturing and ISM service reports suggest that we are at least in a soft patch within the recovery. In addition, political brinkmanship here in the U.S. over cutting deficits has raised the level of angst in the market and as of this past Friday caused Standard & Poor’s rating agency to cut the U.S. debt rating from its coveted AAA rating to AA+. These factors have helped to contribute to above average downside volatility in the market over the last two weeks. Since July 22nd the S&P 500 index has fallen precipitously nearly 16%.
The question remains are we in a correction due to the escalated uncertainties or is this merely a soft patch with a consensus forecast of a stronger 2nd half on the horizon? The answer is that regardless of the direction things take, our clients who have done planning with us are protected in that the success of their long term plan is not dependent on the short term performance and fluctuations of the markets. Think of a yo yo going up and down as you climb a flight of stairs.
If you have any concerns, questions, or would like to talk to us about your current investment situation, please contact Health Insurance Specialists at (301) 590-0006.