Another Bumpy Day

There’s no question that the stock market has been volatile so far this year.  In fact, in the first quarter of 2008, the Dow Jones Industrial Average had 35 days with triple-digit point moves and the S&P 500 had 31 days with a move of more than 1%.

Today’s action was no different.  The day started strong, with a better than expected rise in the GDP of .6%.  The was followed by the expected .25% rate cut by the Federal Reserve.  The end result was that the Dow reached a peak of roughly 13010 at little after two o’clock.  After the Fed cut was absorbed and a few more earnings, reports came out, the Dow closed at 12820.13.  For the day, the Dow  had a range from 12808.98 to 13010.00, for a swing of 201.02 points.

It looks like the Fed will now take a breather from the interest rate cuts that have trimmed a total of 3.25%  off rates since September.

With the summer months, which are generally fairly volatile, fast approaching, prepare for this seesaw up and down motion to happen for a little while longer.

As we always tell clients, as long as your portfolio is allocated the way it should be, although unnerving, these wide fluctuations are not unprecedented, nor are they particularly detrimental to your portfolio.

Hang in there.  This too shall pass.

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