The first part of any new year, particularly the month of March, tends to be a seasonally weak period for the stock market. Perhaps it’s the first quarter earnings fears (the weakest for many companies) or tax collections impacting consumer spending (though refunds do offset this somewhat) or sometimes newly installed politicians after a fall election (newly installed politicians seem to like to make a lot of noise and trouble!) that can spook investors. Be that as it may, we’ve entered that period again.

Certainly, there are enough macroeconomic and geopolitical issues to cause investors’ concerns- trade wars, saber rattling, Brexit, and global slowing to name a few. But bull markets do climb a wall of worry.

We have seen some disappointing March quarter outlooks- even among leading companies. However, the market seems to have discounted these expectations. Moreover, it some instances firms have already called for a cyclical bottom in March, notably semiconductor companies. Yet these factors won’t prevent some market prognosticators from calling an end to the bull market. Beware these calls.

Underlying all these factors is a powerful innovation cycle that continues to unfold. Short of disastrous economic policy, it is hard for us to imagine what could derail an accelerating growth cycle. So we would encourage investors to use any short term correction to accumulate shares in companies leading this cycle.

Happy hunting!

Bruce