Investing involves risk. Depending on the types of investments, there may be varying degrees of risk.
Investors should be prepared to bear loss, including total loss of principal.
4 Your Money is brought to you by NelsonCorp Wealth Management.
It’s now time for 4 Your Money. We’re joined by David Nelson, CEO of NelsonCorp Wealth Management. Welcome back, David.
Thank you, Brandy. Appreciate it.
So, with volatility returning to stocks, what segments of the market look the shakiest to you?
Well, the market as a whole, I mean we’re almost closing in on a record we don’t want, and that record would be four consecutive months where we had negative returns. That hasn’t happened since 1946. So that clearly isn’t a record that we want again. But the area probably that you’d have to say is front and center as far as really rough times, it’d be small caps. And small cap stocks, I have a chart that I think will give people a pretty nice visual of it.
You see that the left side is obviously going back a few years, and this particular chart is going back five years. Then we see a little run-up and then we see this drop off. And if you go to the far right, which you’re seeing there, is that the small cap index, which again, we look at as far as the Russell 2000, it’s probably the most widely viewed as far as in the small cap arena. And what we see is there’s been some advances and then pullbacks. And so the small cap index has been trying to get out of its way, and unfortunately we’re back to cycle lows, which is certainly not where we want to be now. But this is the small cap area. And you look at it in comparison to large caps, they certainly underperformed as far as net regard.
So how should viewers be thinking about this information as it relates to their investments?
Well, a lot of us like to buy things on sale, and this would appear to be a really nice sale, but I guess I’ll cut to the conclusion. I probably wouldn’t be venturing into these waters in a very big way right now. I think the risks clearly are there. Higher interest rates are causing a lot of these companies to struggle and have difficulty.
If you missed any of our discussion, we’ll make it available for you on ourquadcities.com.