I thought it might be interesting to take a view of some market measurements at the moment and historically to give you some context.
This past week opened the earnings season for 1st quarter of 2018. We saw numerous companies beating street estimates, which is often a good sign. In my opinion, I think it is challenging to read which of the companies received a boost from the tax reform and which have legitimately sold more widgets and had higher profits as a result...AND...if they did, can they continue to do so?
On numerous occasions in the past, I have shared with clients that 2018 will not be anything like 2017. Thus far, the market has supported my hypothesis. Since our February high, the market has been stumbling through lower highs. However, the lows are not following suit. This inconsistency across the market provides us with a ray of hope that this shakeout is legitimate. Based on the current market situation, we may find that the dip in the market can prove to be worthwhile later in the year. Those investors that do choose to stick out the rough waters may be rewarded generously.
Last Friday with President Trump sending missiles over to Syria, I remember thinking "Oh, Boy, Here it goes!" as I was reading through the Yahoo Headline on my phone. My wife having asked me what does that mean and the only response I could find to give is...I am not sure yet.
This market has certainly been a lot less enjoyable when compared to 2017, but then again, we saw this market condition coming for some time now. We will also likely see it sticking around for the majority of 2018 and possibly into 2019, before the selling really shows up in force and sends the indexes down further.