Risk is everywhere. It's all around us every day. I'm not simply referring to market risk, but also risks to our identity and finances due to the convenience tradeoffs associated with just about everything being web-enabled these days.
But with all the cyber-related risks out there, it's interesting and scary to remind ourselves that most financial fraud is still person-to-person, not simply the result of crooks hacking into a large company's database. It's the person on the phone, on your doorstep, or even in a fancy office somewhere.
As I'm sure we're all aware, the stock market has been in full blown "react" mode during the past several weeks. While there have been a variety of issues fueling this volatility, the first was interest rates and the second is what some view as a brewing trade war with China. With all the rhetoric bouncing around it's hard not to feel nervous. Anytime the word "war" is used it's bound to ramp up the tension level anyway. So, what's one to do in the face of the current market anxiety? Simply put – stay calm.
The past couple of weeks have been a time of mixed signals in the markets and news media. One day (or even one moment) the news is positive and the next it's negative. It's confusing and can leave one wondering just who's right, the bulls or the bears.
Stocks had staged a bit of a comeback earlier this month after the correction in February, only to go crazy again in the past couple of weeks. Seemingly all of a sudden stocks were back in correction-mode and many in the media seemed to turn bearish. This craziness and mixed messaging came to a head last week, with positive economic news being drowned out by a variety of negative headlines.
One of the things I like about my profession is that there are so many analogies to help explain it. Of the many I've heard over the years, one of the recurring themes is sailing. You're on your boat sailing toward your future, the captain of your own destiny. Hopefully you have a plan, a compass, a good navigator, and so on. I just read a pretty good one and you'll find it below.
The first quarter (Q1) of 2018 could best be summed up as a return to volatile markets. Already this year we have experienced more volatility than in all of 2017. There were six +/-2% moves for the S&P 500 during the quarter compared with zero last year. Following a year of near historic low volatility this heightened level is likely to linger for a while.
Here we go again. That's what I said when I heard about how Wells Fargo is being investigated again for overcharging and generally taking advantage of its customers. We've all heard in recent years how the bank opened tons of unnecessary deposit and credit accounts and overcharged customers for insurance on loans. But now it's not just the banking business that's in trouble, it's also their wealth management arm, Wells Fargo Advisors.