A comment on the recent -Market Correction -

A comment on current market volatility from Fidelity’s Jurrien Timmer Director of Global Macro for Fidelity Management & Research Company

“Whether last week's correction ended on Friday or continues for days or weeks to come is of course unknowable. My guess is that the market chops around for a while, perhaps several months, as typically happens after the economy reaches a momentum peak. For the typical investor, it's worth remembering that part of the value of the stock market is that over the long run, equities generate better returns than less risky investments (like money market funds or bonds) but that the "cost" of those higher returns is higher volatility. In that respect, nobody should view the 52% return for the S&P 500 over the last 2 years—amid record low vol—as normal.

So I for one am not concerned that the stock market is starting to behave like its normal self again. And for investors with an appropriate investment plan based on their risk tolerance, goals, financial situation, and timeline, short-term volatility shouldn't require any action. More active investors may actually welcome this volatility. I myself am relieved actually. Better a correction now than a bear market later.

Corrections are like vegetables in that sense. They don't always taste good, but they can be good for you.”

Jodi Dark