Streetwise: Stay the course, despite others

Although investment opportunities are always plentiful, you need to have a willingness to take decisive action with an overwhelming sense of self-assurance. Moreover, you must be able to stay the course despite the consternation of others. […]

The financial markets are path dependent. A seemingly “temporary” pullback in the S&P 500 has a wealth effect which can cause deleveraging and a reduction in consumer spending, possibly triggering further defaults and impairing supply chains and raising costs. The end result is that equities look less attractive. Yet, this is not a repeat of the Great Recession. That was a liquidity crisis that threatened the financial system. Central banks have ensured the necessary liquidity this time around. The Great Depression resulted from errors in government policy that compounded the real economic impact of a markets crash. Government policy has begun to respond in an effectual manner this time around. […]

Amongst the doom and gloom there are always points of light. Previous columns have illuminated Walmart and Church & Dwight as being possible ports in a storm. This week’s point of light is Abbott Labs (ABT). […]

— Lauren Rudd is a financial writer and columnist. You can write to him at Lauren.Rudd@RuddInternational.com.

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