Friday, April 11, 2014

The Nasdaq Composite Now Down about 8% - This is the Average for a Pull-Back

The Nasdaq composite, which is home to many of the high flying growth stocks, was down about 8% from it's recent highs this morning before bouncing back a bit.  The average market pullback is historically about 8%. If this level does not hold, we will probably see this pull back turn into an 8 to 12% correction.

GWM Model Portfolios currently are invested in a very defensive manner. Accounts have a very high cash position and the invested positions are primarily in the defensive Consumer Staples and the Utilities sector.

The market remains very volatile with 100+ point up days followed by 100+ point down days. Gil Morales, a  well known investment manager, says the market is acting like a chicken with it's head cut off, just running all over the place with no rhyme or reason. In the current environment it is very easy to get chopped up trying to pick a bottom; that would be a fool's game.

The market index averages are concealing a lot of carnage going on under the surface. Many individual growth stocks are down 20, 30 and 40%. While this is creating opportunity, the time to buy is not yet at hand.

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