If you don't like math, you probably won't be reading this post! The formula that I made up will certainly scare you off! But if you are like me, a "math man" as I have been told, then follow along here with what the market continues to tell us.
I= Inflation
IR = Interest Rates
IF = Investor Fear
V = Volatility
Simply stated, Investors are reacting fearfully as we continue to deal with news related to the potential increase in Interest Rates due to Inflationary pricing concerns in our economy. The fear is multiplied (as in the formula) on trading days (like today) when we receive economic news. This is causing Volatility and I would expect this to continue in 2025.
The patterns and market levels from previous blog entries still hold and we expect the range to be in place for a while. What can change this? Time. New polices along with uncertainty regarding taxes and food prices will take more time to settle into the economy. But once they do, it could leave investors with a better runway into the next few years.
Being frustrated with what we are experiencing is normal. Taking advantage of it with active management of portfolios is the best solution!
Author: Steve Economopoulos
Published: 2/12/2025