Many large cap groups have been in a Bear Market for quite some time now. If you owned any of the large pharmaceuticals, financials, health care, or retail stocks, your portfolio has been performing poorly. Small and micro cap stocks seemed to also finally correct this past week after a great four month run. We saw values erode for no particular reason. This was inevitable.
Nothing ever goes up in a straight line.
We view this correction as healthy. As stocks continue trending higher entry levels become riskier. A correction will create buying opportunities for investors with capital to put to work. We heard a lot of rhetoric in the media this week about the New Economy Companies versus Old Economy Companies. New Economy companies could be defined as those which are taking advantage of our new digital business environment.