Last Friday, October 19th, Runnymede managing partner Andy Wang returned to The Reuters Building in Times Square to chat with news anchor Fred Katayama. In this segment, Fred asked Andy about a variety of subjects including market volatility, midterm elections, and sector rotation. Watch the segment below.
Volatility is back. As we saw in February earlier this year, the market has corrected rather quickly -- down 7% for the S&P 500. "When volatility spikes, it's like taking the elevator up, but then you have to walk the stairs down," said Wang. "Meaning that once volatility is here, it doesn't just disappear overnight. It takes some time to process through."
Strong Corporate Earnings
Currently, Runnymede believes it's important for investors to focus on positive fundamentals. U.S. GDP is still growing with 3Q earnings forecasted to increase 21%. We've written about the strong corporate earnings season through Q2 and that growth is forecast to continue through Q4.
Historically stocks are strong in the following twelve months after midterm elections. Since World War II, if we had a majority change in Congress, the market has risen in price and the average gain was between 12 and 13 percent. If there was no majority change, the market was up an average of about 20 percent.
Are there things that you are worried about going into the end of 2018?