The Known Unknowns

Well that was an exciting day to start the new year. The S&P 500 (SPY) opened down 1.66%, fell another 0.95% and then rallied 1.2% into the close. When all was said and done it fell 1.4%, making today the worst opening day since 2008.

While it may be interesting to look back at what opening days like this have historically meant for the rest of the year, the reality is these numbers have absolutely no bearing on what will actually happen. Nobody knows what the future holds and as we prepare for the new year, it’s helpful to remind ourselves of the following known unknowns.

  1. What is priced in to the market.
  2. Who is on the other side of your trade.
  3. What the optimal asset allocation will be over the next twelve months.
  4. What investors will be willing to spend on each dollar of earnings.
  5. What the Fed will do with interest rates.
  6. How fast or slow the economy will expand or contract.
  7. Exogenous events that will impact the market.
  8. Your future spending needs.
  9. How you will react to large market moves without a plan to guide you.
  10. What the best asset class/sector/stock will be over the next year.

If watching the market is not your full time job, and even if it is, having a plan in place is the most important thing you can do to increase the likelihood of achieving your goals.



This content, which contains security-related opinions and/or information, is provided for informational purposes only and should not be relied upon in any manner as professional advice, or an endorsement of any practices, products or services. There can be no guarantees or assurances that the views expressed here will be applicable for any particular facts or circumstances, and should not be relied upon in any manner. You should consult your own advisers as to legal, business, tax, and other related matters concerning any investment.

The commentary in this “post” (including any related blog, podcasts, videos, and social media) reflects the personal opinions, viewpoints, and analyses of the Ritholtz Wealth Management employees providing such comments, and should not be regarded the views of Ritholtz Wealth Management LLC. or its respective affiliates or as a description of advisory services provided by Ritholtz Wealth Management or performance returns of any Ritholtz Wealth Management Investments client.

References to any securities or digital assets, or performance data, are for illustrative purposes only and do not constitute an investment recommendation or offer to provide investment advisory services. Charts and graphs provided within are for informational purposes solely and should not be relied upon when making any investment decision. Past performance is not indicative of future results. The content speaks only as of the date indicated. Any projections, estimates, forecasts, targets, prospects, and/or opinions expressed in these materials are subject to change without notice and may differ or be contrary to opinions expressed by others.

The Compound Media, Inc., an affiliate of Ritholtz Wealth Management, receives payment from various entities for advertisements in affiliated podcasts, blogs and emails. Inclusion of such advertisements does not constitute or imply endorsement, sponsorship or recommendation thereof, or any affiliation therewith, by the Content Creator or by Ritholtz Wealth Management or any of its employees. Investments in securities involve the risk of loss. For additional advertisement disclaimers see here:

Please see disclosures here.