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Market Insight w/ Ivan

Market Insight w/ Ivan

October 07, 2022

Hello Candor Family! 

As Fall is setting in, hopefully you all have been watching some amazing football games, both college and national.  Last weekend our family cheered for the N.O. Saints as they attempted to beat the MN Vikings in London, UK.  During the third quarter two Viking rookies altered the course of the game.  What appeared to be a 3rd down punt, quickly changed into a more sinister plan against the Saints, and later resulted in a narrow loss for the Black and Gold.

Punter Ryan Wright scooped up the hiked ball and went full QB, quickly passing outside to #83 Jaylen Nailor for the first down (and his first career catch).  #35 Saints Defensive Back KeiVarae Russell (5 season veteran) took the bait and ran deep, leaving Nailor open to seal the deal.  Minutes later, the field goal was scored by the Vikings, directly contributing to their victory. The stunned Saints played valiantly in London, something to be proud of, but it just wasn’t enough to secure a lead.  The clock wasn’t in their favor and they succumbed to a 3 point loss, an equal dose to the outcome of that fake-punt-play.

This week, as I’m watching the markets rebound, I am reminded of the game and its puzzling play.  Sometimes we are led to believe that we can read the markets and make sense of it.  There’s a lot of “commentary” out there, and overconfident experts will assert their opinion as truth.  The market always has its own plays, though.  We must beware of the head-fake.

Last August we saw such a rally after the FOMC meeting aligned with some positive earnings announcements.  By the end of August all that had disappeared. This week we seem to be rebounding from last week’s declines due to positive manufacturing numbers.  These are short moves that we cannot rely on. 

To anyone who would argue, I would direct their attention to the VIX index.  The “VIX” stands for the Chicago Board of Exchange’s “Volatility Index,” and is a measure of the market’s expectations for volatility over the next 30 days.  Usually when it’s this high, stock market swings of 2% in either direction are common.  That means the Dow can be expected to vacillate 1000-1500 points in any given day.   When it does, we can’t let that trick us into jumping in or out of investments.

I’m not saying things are rosy.  Volatility is high for a reason, and I firmly believe that until inflation is under control markets will not regain stable footing.  The current environment is one of dislocated global markets, scarcity, low productivity, and easy-money hangover.  The Fed has asserted its mission to thwart inflation, but there is a lot of inflationary pressure to overcome.  Will they be successful?  Let’s hope so, but the road ahead may be a long one. 

So don’t follow the trick play.  Ignore the head-fakes that come when the market changes direction.  Stick to the basics.  If you are retired or soon to be, this means stay diversified and stay quality.  Stick to the plan.  If you are in good investments and stay that way, you are playing your position well. 

If you aren’t sure about your investments, talk to your financial advisor.  Ask lots of questions and be forthright about your desires for income, liquidity, risk and return.  If it turns out that there is no plan in place, reach out to a trusted financial advisor and get one in motion.    

Always with Candor,



*The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly.