The Bad: Stocks fell in weak trading on Friday, to end a lackluster week for U.S. equities. Trading was broadly negative but far less intense than the volatile sessions that marked the prior two weeks.
The Ugly: stocks finished the week down about 3.5%, and down about 9% from the end of July.
The Good: the intensity of the selling abated somewhat during the week.
And, more importantly, the market’s decline over the past three weeks has significantly expanded the number of companies that now offer attractive returns from current valuation levels.
We plan to use any further market weakness in the near future to exploit opportunities that the market’s current correction might provide us. Stock prices do not necessarily stop declining just because valuations become “cheap”, but history strongly shows that capital that is invested in great companies when they sell at attractive valuations eventually leads to very solid returns for long-term investors.
With best wishes from the Firm to our clients for a safe and relaxing Labor Day weekend.