Two months down, ten to go.  Time to talk about the market.  What market you ask?  Wegmans?  Whole Foods?  The Ac-a-me or The Giant?  Maybe the Shop Rite or Shop & Bag?  Nope… we’re talking the stock market.  And how much fun it has been.

As we closed out February, the Dow was down 7.3% year to date and the S&P was down 5.5%.  With all the ups and downs in February, the S&P closed down a whopping 8 points, going from 1,940 to 1,932.  Exciting!!!

Are we out of the woods or will the volatility act up again?  Will the market head up or take another leg down?

According to a recent column in the Wall Street Journal (read here), “Poor earnings, persistent volatility and turbulence in the market for lower-rated corporate bonds have investors fearful the new-found resilience may be short-lived.” One big concern is the drop in corporate profits with earning down 3.6% on average from a year ago for the S&P 500 companies.  In fact, “earning at S&P 500 companies are on track to have dropped from a year ago for three straight quarters, which would be the first time that has happened since 2009.”

So where are we headed?  One analyst quoted in the column says that we still have a profit recession.  Should profits continue to decline, how far will that pull down the market?

Here’s my bottom-line.  For now it seems as though this is still a time when short term investors and those that are loss averse should review their portfolios and see if they are structured to handle more volatility.  More important, are you set up to handle more of a downturn?