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Market Commentary: Is the Sky Falling? 8/24/15

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“Be Fearful When Others Are Greedy and Greedy When Others Are Fearful” - Warren Buffett
U.S. Market Selloff
The US and International stock markets have declined significantly since last week. The primary reason for the massive selloff of stocks has been due to hedge fund margin calls and traders that levered up to invest in the market during a bull run. Now traders are called to repay and investors are forced to hit the ‘sell’ button without much thought, giving no support to the market. 
Many institutions have been forced to selloff more and more as losses continue accumulating. As a retail investor, you can have control over your stock portfolio by staying put, investing more in solid companies, and waiting until the dust settles. Being nimble gives you the advantage over bigger institutions. As Warren Buffet mentions, you do not invest in the stock market based on the price of a company, you invest to buy a company that has a great business even when Mr. Market says otherwise. 
Global Economy Update
The Chinese government devalued its currency earlier this month to artificially boost its economic slowdown. In an effort to make Chinese export trade more attractive, every other country in the world became expensive. Global commodity prices such as oil are getting crushed with the strength of the U.S. dollar, which continues to increase with the expectations of higher interest rates coming this fall. With eyes on China, the media has put a hold on European and Russian economies as they repair themselves. Expect more noise to come from the emerging markets this September. 
Stay calm during this storm. Making irrational decisions in the short term can have severe impacts on your long term returns. Overall, the U.S. economy is relatively healthy as housing and auto sales are improving. With the steady decrease of unemployment and consumer savings slightly higher due to lower gas prices, consumer spending continues to steadily rise translating into a stabilizing and stronger economy. 
Although it may seem like a good time to buy stocks at a cheaper price, we would recommend refraining from hitting the 'buy' button just yet. If you have your eyes on companies you believe are great additions to your portfolio, keep a close thumb on them for the next few weeks and monitor how they perform. If indicators are showing that the stock is steadily going up during this downturn you may want to purchase a small lot of shares and add more as the market continues to stabilize. 
Stay tune as we provide you with more market updates. Please don't hesitate to call me if you have any more questions about the market. 
At the time of this commentary Vijar Kohli, his family and/or clients of Golden Door Asset Management held no positions in the stocks mentioned above — although positions can change at any time.
Vijar Kohli is the Portfolio Manager of Golden Door Asset Management, LLC, a registered investment advisor specializing in individual and high net worth individual private wealth management. For more information on investing with Golden Door Asset Management, LLC please visit our website, Golden Door Asset Management, LLC is a New Jersey LLC, with its principal office located in Manalapan, NJ.
Vijar Kohli is also the publisher of CareStocks, a newsletter focusing in on healthcare services, medical equipment, technology and real estate stocks. More information to the newsletter can be found at
© 2015 Golden Door Asset Management, LLC. All rights reserved.
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