Why, as an adviser, I really like down days:
For one, they always confirm that rebalancing is a good thing: With few exceptions, after each client review meeting for quite some time now we've been reducing exposure to the stock market. Not at all in a market-timing effort, but in remaining consistent with each client's objectives and tolerance for volatility. Plus, we generally have a steady flow of new cash coming into the practice (recent retirees, heirs, property sales, systematic contributions, etc.). I always feel better buying on the down drafts, as opposed to buying when stock prices are on the rise.
So, today's a good day. If tomorrow sees follow-through selling, even better. If this is the beginning of that lately elusive 10%+ correction, perfect! There's no time like the present for the market to take a much-needed, and inevitable, rest.
If this one indeed morphs into that meaningful correction, or an all-out bear market, then we look forward to buying more at cheaper prices when those rebalancing dates come around.
In terms of what today's all about: Well, there are a number of headlines to consider, but I'm thinking the jump in today's reading on the Employment Cost Index has (per my recent commentary) traders a bit nervous. Although the bond market, while off a titch, isn't freaking out on that news (perhaps bond traders are focused on the geopolitical)... ??
I'll keep you posted...
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