The recent volatility in the world markets is creating an uneasy feeling for many and with market news capturing so much of the media headlines, it’s worth taking a look at what is happening.

The global market selloff has pushed major indicies into correction territory (defined as a drop of 10% or greater from recent highs). This is not an uncommon event in the market. What is uncommon is how long we have gone without a correction in recent history.

We continue to believe the global economic fundamentals are strong but there are some areas where risk re-pricing is needed and is now taking place. We should remind you that it is in these moments, from our perspective, that the well-balanced and diversified portfolios we recommend are designed to provide a level of protection from these periodic market downturns.

While as a whole we feel positive about the fundamentals of the global market, we do expect continued volatility for the remainder of the year. Although many of the headlines and ‘reasons’ for the recent volatility we believe are unfounded, we do feel China presents some challenges. A fair number of the larger US companies derive revenue from China so we will continue to keep an eye on the developments and recommend changes if we believe they are warranted.

Our 3 main takeaways:

1. The market selloff that has occurred over the past week, in our view, is due to a combination of a reaction to China’s stock market volatility and currency devaluation, the continuing decline in oil prices, worries about a fed rate hike, and normal cycles within the market that are long overdue.

2.  We believe the domestic economy is still positioned for growth (albeit at a slow to moderate rate).

3.  We anticipate higher volatility for the remainder of the year and we encourage patience and willingness to stay the course, remembering that we use diversification, specifically, for markets like this.

Market corrections provide us with opportunities as well.  They can provide us the ability to take advantage of tax loss harvesting or invest excess cash, which points to the fundamentals of buying low (ie taking advantage of market corrections).  Your financial advisor can help you navigate your options if you are looking to take advantage of the opportunities that market changes bring.

Whether the market is booming, or is volatile, there are smart ways to be thinking about your finances and your investments.  That’s why we are here; we are here to help you make wise decisions and to help guide you through the changes in the market.

Securities and Advisory Services offered through Commonwealth Financial Network®, Member FINRA/SIPC,a Registered Investment Adviser.  Fixed insurance products and services offered by Summit Wealth Group are separate and unrelated to Commonwealth.