“Volatility Ahead”

 

 

Jeffrey Kleintop, CFA

Chief Market Strategist

LPL Financial

• The volatility and classic 5-10% pullback we have seen so far this year is perfectly normal and very likely to be a recurring pattern throughout 2010 as the economy transitions from recovery to sustainable growth.
• A key contributor to the volatility that accompanied the transition to sustainable growth in 1994 and 2004 was the signaling of rate hikes
  by the Fed. After hiking the discount rate last week, the market is likely to remain focused on the Fed this week as Federal Reserve Chairman
  Ben Bernanke will deliver his semi-annual report on the economy and interest rates to House and Senate panels on February 24 – 25.
• There are several ways to potentially enhance returns during market volatility including: More frequent tactical adjustments to portfolios, focusing on the yield, using active management rather than passive indexing strategies, increase diversification by adding low correlation investments and incorporating non-traditional strategies that help in an environment of increased volatility.

To read more details, please click on the image and download the PDF.

LPL Financial Weekly Market Commentary for February 22, 2010

Tagged as: Ben Bernanke, Federal Reserve, Financial News, Jeffrey Kleintop, LPL Financial Research, Volatility, Weekly Market Commentary