Third Quarter earnings season is upon us and I am sure it is hard to be “optimistic” given the walloping yesterday not to mention the volatility of the past days. Like yesterday’s weak open after IMF cut growth outlook that reversed strongly when the 10am report on the jobs was released, only to find another sell-off thereafter. I am with you, I sometimes couldn’t believe the “ficklemindedness” of the market, but I guess one thing that this market brings to mind is that when we are looking at short-term data, that we take our profits in line with what the market is doing. It’s that classic line “It’s not you, it’s me” – yes, that’s the market talking.
Also worth noting that since the S&P and many stocks had a robust run during September that the declines were a healthy exercise preparing for the earnings season. Will this be a strong earnings season? There are many who say that it would be with the improved jobs, manufacturing, merger activity supporting this idea, and that current valuation is “reasonable” as Warren Buffett is quoted in this article in Bloomberg.
Just note some factors that could affect your pet stock’s performance :
1. strong US dollar
2. strength of sector (e.g. resources / commodities show weak demand throughout)
3. earnings growth and guidance
Geopolitical factors do spook the market from time to time, so watch out too how that impacts the market (has shown to fade quickly with other news coming in hot!). Russia is so far acting like there’s not much pain on their side but we’ll just have to keep watch.
I’ll be conducting the workshop on “How To Invest In the US Stockmarket” on Nov. 15 so make sure you join us there to maximize your investment returns. Regiser here or at follow this link: http://www.iluvlearning.com/make-money-in-the-us-stock-market/
