The U.S. stock market was up 6.01% for the first quarter of 2021.
Volatility returned to U.S. equity markets as bond yields surged. Rising interest rates make it more expensive for companies to raise capital creating fear that future growth could be limited. The cause of rising rates is the fear of inflation, which is bad, and the anticipation of economic growth, which is good.
Wow what a year in the stock market!
We started the year hearing about Coronavirus for the first time. Then the first Coronavirus death occurred in February in Seattle. Then the pandemic took over, causing States to shut down all activities. The market plummeted over 34% in March.
Since then, Covid has ruled the headlines, however the market has recovered solidly from the March lows, once again proving that "staying put" is the best course of action when market volatility spikes.
The U.S. stock market was up an impressive 9.24% for the third quarter, which is somewhat surprising given the market correction that occurred in September.
The correction was due mostly to fears that stock prices have recovered too much too quickly. It was a standard market pullback, and not out of place considering the amazing recovery that has occurred since March. These corrections are the price one pays to invest in stocks. Although the volatility has become more intense the past few years.