A Message On 2016 Volatility

CEO Michael Conway discusses volatility in 2016.


Hello, everyone. First, I want to wish everyone a happy and healthy new year. I know many of you had many exciting successes in your personal and professional lives over the last year, and all of us at Conway Wealth Group wish more of that success heading into 2016.

As it relates to the financial world, last year was an interesting year, to say the least. As markets experienced higher than normal volatility amid ongoing discussions about the Federal Reserve raising rates for the first time since the great recession.

Today in the first full trading day of 2016, US markets opened lower after the Shanghai Composite Index lost nearly 7% following lower manufacturing data in China. Despite such a disappointing start to the new year, we want you to know that, as always, we are closely monitoring your portfolios as well as market and economic developments.

For a while now, we have discussed with you the possibility for both short and medium-term volatility amid current macro economic concerns, including oil prices, Federal Reserve policy, and the general strength of global economies. In particular, we have noted that the run-up in equity since 2008 has, to a good extent, reflected central banking policy rather than significant economic growth.

We want to remind everyone about our management philosophy and how that philosophy applies to situations just like today. This volatility illustrates the reason we create diversified, long term portfolios for each client. Indeed, the portfolios we’ve developed with you reflect both your individual needs and the expectation that volatility will inevitably occur over the lifespan of a portfolio.

Although volatility should continue in the new year, we certainly don’t believe investors should exit markets. On days like today, many active money managers or stock pickers might choose to sell, locking in losses, and disrupting long term strategies. We want to ensure our clients maintain a long term perspective to keep plans on track for future success. Of course, we all hope for a better year for markets despite the current challenges. In the meantime, enjoy the start of 2016, and remember, you are well positioned.

As always, please don’t hesitate to call us with any questions about these issues. Thank you and have a great night.