U.S. Stocks have fallen nearly 4.0 percent so far in 2016 and it may get worse before it gets better.
The sluggish start “doesn’t necessarily point to a year of losses.” “January often is a bad month for stocks and all of the most recent selling has beaten down some shares low enough to interest selective investors.”
The average stock in the S&P 500 is off almost 21.3 percent from its 52-week high. The lows seen in August 2015 were partly triggered by worries over a slowdown in China’s economic growth, and “this remains a concern as reflected in a further slide in the Chinese yuan on Thursday.”
“There are other geopolitical factors that have affected the markets; tension between oil producers Saudi Arabia and Iran and a nuclear bomb test by North Korea.”
“The recent declines in U.S stock prices also raised concerns that a weak January could result in a down year for stocks, “but there is scant evidence for that idea.” Although the markets have gotten off to a rocky start, it is not time to give up on them yet.