One Cookeville investment advisor says the volatility of the stock market due to the new COVID strain should not worry long-term investors.
Jason Murphy of Diamond Financial Investment Group said while the market experienced the greatest deep ever due to the pandemic, it also saw the greatest rally history later that year.
“People are going to make some snap judgement and decisions and that’s why we are seeing some of the volatility,” Murphy said. “But, I really do believe that any likely impact going forward will likely be short-term.”
Murphy said he sees at least another year of a bullish market. However, Murphy said from his research, data suggests a recession is due in the next two years.
“The Shiller PE Ratio is at basically all-time highs, which could be a reason for concern,” Murphy said. “It does point towards the likelihood of a long, drawn out recession within the next one to two years. However, keep in mind that often the best stock market return happen in the last 12 months of a bull market, and we have been in a bull market for the last 12 years or so.”
Murphy said the political climate may also affect the market.
“The phrase is the, ‘Most Favorable Period,’” Murphy said. “The Most Favorable for investing during a presidential cycle is from October 1st of the second year, which is basically where we are at right now, until December 31st of the fourth year. So as far as a political standpoint, I do believe we will still see a rise.”
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