In this episode of "Nurturing Financial Freedom," we discuss the surprising market volatility that occurred in early August 2024 and explore what investors should take away from these events. But first, we actually met in person last month - for the first time after working together for over five years!The market's volatility in August was triggered primarily by two factors: weaker-than-expected economic reports and high market valuations. The Institute for Supply Management’s report on business indicated declining confidence in the manufacturing sector, which, alongside a disappointing non-farm payroll report, caused investors to worry that the economy might be slowing too quickly in its fight against inflation. This led to a significant market pullback, particularly in the Dow Jones Industrial Average, which dropped 2,000 points over a few days. But even in the time between writing this episode and recording it, market volatility has calmed.Alex and Ed emphasize that while these reports sparked concern, the broader economic context remains positive. They remind listeners that market fluctuations are normal, and short-term downturns don’t necessarily signal long-term issues. The key takeaway is the importance of maintaining a balanced and diversified portfolio to withstand such volatility. They also highlight the Federal Reserve's potential role in stabilizing the economy, noting that if a significant slowdown occurs, the Fed has the ability to cut interest rates to stimulate growth. It's possible we see this after their next meeting in September.Predicting short-term market movements is extremely difficult, akin to forecasting the weather. Instead, the focus should be on long-term strategies and maintaining perspective during turbulent times. Ed advises against panicking during market volatility, stressing the importance of staying the course with a well-diversified investment plan. You can always email Alex and Ed at info@birchrunfinancial.com or give them a call at 484-395-2190.Or visit them on the web at https://www.birchrunfinancial.com/Alex and Ed's Book: Mastering The Money Mind: https://www.amazon.com/Mastering-Money-Mind-Thinking-Personal/dp/1544530536 Any opinions are those of Ed Lambert and Alex Cabot and not necessarily those of RJFS or Raymond James. The information contained in this report does not purport to be a complete description of the securities, markets, or developments referred to in this material. There is no assurance any of the trends mentioned will continue or forecasts will occur. The information has been obtained from sources considered to be reliable, but Raymond James does not guarantee that the foregoing material is accurate or complete. Any information is not a complete summary or statement of all available data necessary for making an investment decision and does not constitute a recommendation. The examples throughout this material are for illustrative purposes only. Raymond James does not provide tax or legal services. Please discuss these matters with the appropriate professional. Diversification and asset allocation do not ensure a profit or protect against a loss. Past performance is not indicative of future returns. CDs are insured by the FDIC and offer a fixed rate of return, whereas the return and principal value of investment securities fluctuate with changes in market conditions. The S&P 500 is an unmanaged index of 500 widely held stocks that is generally considered representative of the U.S. Stock Market. Keep in mind that individuals cannot invest directly in any index, and index performance does not include transaction costs or other fees, which will affect actual investment performance. Individual investor's results will vary. This information is not intended as a solicitation or an offer to buy or sell any security referred to herein. Future investment performance cannot be guaranteed, investment yields will fluctuate with market conditions. International investing involves special risks, including currency fluctuations, differing financial accounting standards, and possible political and economic volatility. There is an inverse relationship between interest rate movements and bond prices. Generally, when interest rates rise, bond prices fall and when interest rates fall, bond prices generally rise. Investing in small cap stocks generally involves greater risks, and therefore, may not be appropriate for every investor. The prices of small company stocks may be subject to more volatility than those of large company stocks. Securities offered through Raymond James Financial Services, Inc. Member FINRA/SIPC. Investment advisory services offered through Raymond James Financial Services Advisors, Inc. Birch Run Financial is not a registered broker/dealer and is independent of Raymond James Financial Services. Birch Run Financial is located at 595 E Swedesford Rd, Ste 360, Wayne PA 19087 and can be reached at 484-395-2190. Any rating is not ...
