Weekly Wrap: Inflation Fears, SPACs, Morningstar Medalists

Editor's note: Read the latest on how the coronavirus is rattling the markets and what investors can do to navigate it.

I told you so--sort of.

Last week, I noted that great first-quarter earnings plus a strong economy don't necessarily translate into future stock market gains. And what happened this week? The stock market took some knocks, with the major indexes on Wednesday notching their largest one-day losses in quite a while.

Before anyone thinks I have the ability to move markets--or to predict their direction--let me clarify: I specifically said that I don't know whether stocks have more room to run. And I still don't.

But I do know a few things.

For starters, I know that inflation fears drove at least some of the stock market sell-off during the week. Although the Federal Reserve has made clear that it won't allow inflation to run rampant, it has acknowledged that it'll let things run hotter than usual until inflation averages about 2% over an extended period. As such, those worried about inflation--specifically, pre-retirees and those already retired--can consider adding some inflation-fighting investments to their portfolios.

I also know that given how long it might take for inflation to settle around that 2% level, market volatility may very well persist, or at least rear its head on occasion throughout the rest of this year. Those uncomfortable with market uncertainty might want to confirm that their asset allocations jibe with their time horizons and goals. Or check up on their savings and spending rates.

And lastly, I know that our emotions can get the best of us during times of market turbulence. Don't let that happen. Instead, recognize your biases and keep them in check.

--Susan Dziubinski

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