Our thoughts:
"Soaring inflation and record market highs may leave investors wondering whether it’s time to adjust their portfolios. Researchers have examined a wide range of timing strategies based on considerations such as earnings, dividends, interest rates, and economic growth. A recent Morningstar report showed that investors may be better off steering clear of tactical asset allocation strategies and avoiding making short-term shifts among asset classes."
After touching record highs in early January, US stocks have slumped, and investors have been confronted with worrisome headlines in the financial press:
“Giant Stock Swings Send Some Into Bear Territory”
- Gunjan Banerji and Peter Santilli, The Wall Street Journal, January 18, 2022
Some stocks that attracted intense interest last year have fallen sharply from their previous highs, as
Exhibit 1 shows.
Stock slump
Exhibit 1
| Name |
Ticker |
Return through 12/31 |
Return through 1/31 |
| Robinhood Markets Inc. Class A |
HOOD |
-79.1% |
-83.4% |
| AMC Entertainment Holdings Inc. Class A |
AMC |
-62.5% |
-77.9% |
| GameStop Corp. Class A |
GME |
-69.3% |
-77.4% |
| Tesla Inc. |
TSLA |
-15.0% |
-24.7% |
...
