A volatile stock market means we have a strong economy


SPRINGFIELD, Mass. (WWLP)-   Stocks on wall street are continuing a volatile trend that started last week. Over the past six months, the economy has seen increases in the country’s GDP, and corporate earnings in 2017 are up 10%. Both are signs that our economy is strong.

Yet, you may be on edge about investing your money this week.

“It’s kind of like I’m at a stand still right now”, says Melissa York of Springfield.

The S&P 500 fell by more than 10% by Thursday from it’s record high in January. But, despite the losses, the economy is still strong and history shows, volatility is actually good for the market.

“So, coming down 10 pecent is normally considered a correction, and it just means that there’s kind of a reintroduction of volatility and the market is down off its high”, says Timothy Suffish, the Head of Equities at St. Germain Investments.

The average market drop within a year is 14 percent. While our recent drop is causing some losses, it’s not actually unusual.

Suffish told 22news the reason the market is dropping now is because of a fear the economy is too strong and complacent.

That can lead to inflation, which will cause the fed to raise interest rates too high too quickly.

He says diversify your portfolio in both stocks and bonds that are high and low risk and track your financial goals 10 years out.

“The crazy days that we have had in the past week don’t really have as much of an impact if you diversify”, says Suffish.

Suffish’s 10 year outlook for a diversified portfolio is a 5-6% growth.

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