Hitting the Green

In the Spring of each year, Courtney and I plan a week or two in Palm Desert, California. Our firm’s great technology allows us to work in the morning and, in the afternoon, enjoy the sunshine and a few rounds of golf. There is just something special about seeing rain in the forecast at home while we enjoy clear skies and 85 degrees.

This year, our patio was adjacent to a Par 3 which meant every morning we were treated to a long line of golfers teeing off with one goal in mind—hitting the green. Let me say, for the technology involved, and the cost and time spent on lessons and green fees, this should be easier. Based on what became a rather large sample set of golfers from teens to grandparents, hitting the green is not an easy thing. For what is supposed to be a relaxing game, there sure seem to be a lot of frustrated people.

Investors don’t seem to be hitting too many greens this month, either. Blame the higher-for-longer interest rate mantra now so prevalent in the press, the conflict in Ukraine or the Middle East, or volatility in energy prices, the market has reminded us that it is, indeed, bi-directional.

Without a doubt, the news hasn’t been great. Recent inflation and consumer sentiment numbers have the Fed indicating interest rates will likely remain higher for longer than they expected. It is important to point out that no one is saying rates are never going to retreat. It remains a ‘when’, not ‘if’ equation. Although highly discounted right now, it is also possible that the Fed could pivot and raise rates again. While that would certainly put additional pressure on stock prices, it too would only be a temporary increase in a very long game.

During times like this it is important to keep in mind that we remain in a bull market. Bull markets experience pauses, pullbacks, and even corrections, all within the construct of a much longer-term move that ultimately takes stock prices significantly higher. I’ve written before that we use these periods to identify positions we want to exchange for stronger companies. Expect this fine tuning in the coming weeks.

In fairness to the golfers on the Par 3, while only a few hit the green, the vast majority seemed to be having fun. I noticed that almost all took advantage of the beverage cart.

Opinions expressed in the are those of the author and are not necessarily those of Raymond James. Any information is not a complete summary or statement of all available data necessary for making an investment decision and does not constitute a recommendation. Diversification and asset allocation do not ensure a profit or protect against a loss.