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COMMENTARY | Deja vu! I was expecting some type of market volatility today, following Standard and Poor's downgrade of the U.S. long-term debt rating and prepared for it by creating and placing orders to take advantage of some the downward pressure.
The President's speech, in my opinion, was simply done out of a sense of obligation and without substance. It did nothing to alter my impression, and apparently that of many others, that the economy has weakened but is still growing. Over the past few months, I have reduced the risk profile of my clients' portfolios and will be adding to them strategically. In my practice, I do not actively trade stocks but rather attempt to build portfolios that help people reach their goals. In markets such as we have seen over the past few days, it has become more difficult, because it is becoming extremely more difficult to forecast corporate earnings.
In the ideal world, my buy orders would be executed and t the market would reverse itself and go straight up. Rarely does that happen. Many of my orders were executed, and the market did have a healthy bounce, but it closed on a weak note. I would not be surprised to see the market trade a few percentage points lower before forming a technical bounce. If you have angst over your own portfolio, let me assure you that my angst is magnified forty fold. I may go long Pepto-Bismol.