Big daily swings in the stock market have become the norm over the past few weeks. It all started when the Fed shared the possibility of cutting back on QE, which gave traders concern that the bull market was ending. As a result, the investor confidence is down and the stock market advance has stalled with a 5% intraday correction in the Dow.
For the rest of the summer, I expect that daily 100+ point changes in the Dow will be common. For me, the volatility is a buying opportunity, enabling me to make some small purchases in our ETF investment strategy when the market is down. It is emotionally tough to buy into the market during the 100+ point declines. By keeping the amounts small, I will hedge slightly against the possibility of a major near term stock market decline.
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This is not financial advice. Please consult a professional advisor.
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