We have spent the past month looking at several indications that we might be in for a 5-10% correction. These types of corrections are completely normal and healthy for the markets. As corrections go, these are relatively minor and there is little reason to run for the exits. Valuations are not extreme and systemic risks are not significant. While geopolitical tensions are always a concern, they are almost never a reason for more than minor corrections. Arguably, the first Gulf War came at an economically weak period and the markets may have corrected anyway.
Filed in: Investing Ideas
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