What a difference a year makes.

At the end of 2015, the market was still reeling from a pronounced selloff in commodities and weakness in emerging markets. The backdrop was sufficient to cause a negative reaction to the Fed’s rate hike in December of that year, and resulted in one of the worst Januarys for stocks since the Flash Crash in 2010.

As we head closer to year-end and what is widely believed to be the Fed’s next rate hike, the markets seem to be in a much better place. Economic growth has stabilized, crude prices have rebounded, and the U.S. dollar’s uptrend has muted. All told, it appears that the markets should view the potential rate in a positive light as confirmation that the expansion is ongoing.

Of course, in order to get to December we have to survive the election. After the latest Clinton email flap, I expect significant volatility during the month. Long-term oriented investors should consider any pullback as an opportunity to add to positions.

Fixed-income oriented investors are seeing the current situation as a glass half empty, insisting that cash is the right asset as we head into year-end. 

Although that might be true for those concentrating on investment-grade debt, I contend that short-term weakness in high-yield bonds and equities should provide a good entry point. 

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