Call us crazy, but we’re buying.
Despite the negative news dominating headlines, we believe there are compelling reasons to buy into the market. Yes, the Fed raised interest rates for the fourth time this year, oil prices continue to drop, and Trump has refused to sign a bill to avoid a government shutdown. However, amid all the doom and gloom, the data shows a strong and healthy economy: forecasts suggest continued growth into 2019, the Leading Economic Index increased in November, yield curves are normal, and corporate profits are rising. In fact, we believe the market is undervalued by as much as 20%, making it an attractive opportunity for investors.
It's important to remember Warren Buffett's famous saying, "Be greedy when others are fearful. Be fearful when others are greedy." This is the time to be greedy and take advantage of the attractive valuations. The bottom may be setting in place soon, or it could take months. However, history has shown that the time of maximum pessimism is often the best time to buy. Don't let loss aversion keep you on the sidelines and miss out on the rebound. Focus on the strong underlying fundamentals and invest for the long-term.
Nothing herein is intended to be investment advice. Investment in the stock market involves risk of loss. Past performance is no guarantee of future returns. The content contained in this article represents only the opinions and viewpoints of the Interlaken Advisors editorial staff.