Combating Current Market Volatility

Chartz with Jartz – Historically, the equity market has seen lower performance across various sectors during the September and October months. As earnings season approaches once again, investors remain speculative on overall performance. This speculation could cause an uptick in volatility, above what would already be implied given the timeliness of earnings season. Along with questions in the equity market, the fixed income market has experienced a difficult October due to inflation and interest rate uncertainty. The Federal Reserve’s hands on policy seems to be coming to an end as tapering – decreasing purchases of securities and bonds – is expected to slow down moving into 2022. The Investment Management Team (IMT) has been following the chart patterns of these fixed income investments and have begun adding a higher position in fixed income to certain accounts with the cash that was previously raised to cushion the volatile months. Long-Term Corporate Bond (VCLT), Intermediate-Term Corporate Bond (VCIT), Short-Term Corporate Bond (VCSH) and Mortgage-Backed Securities (VMBS) have all demonstrated similar technical patterns based on our analysis. The breakdown occurred in September as news regarding inflation was worse than expected; as a result, the securities moved below the 20-Day and 50-Day Moving averages and have yet to break above those resistance lines. The IMT will continue to monitor these holdings and find opportune points to increase holding size. For more updates on holdings and news please visit the blog every Wednesday.

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