Do Not Panic - Take Two

The market is in the midst of a pullback from a multi-year high it touched just 48 hours ago. When the S&P 500 closed Tuesday on the high of the day at 1530, it was the best level since November 2007. The headlines were bullish and investors were racing to get into stocks.

Wednesday saw the S&P 500 log its worst day of 2013 as it fell 1.3%. By midday Thursday the index was down another 0.7%, wiping out the gains of the last two weeks. In total the S&P 500 is 2% from the highest level since 2007.

The theme the last couple of weeks is that the market was due for a pullback of about 5% because it had the best January in two decades and stocks were ahead of themselves. So here it is!

But instead of being patient and letting the market enjoy a healthy pullback, investors will panic and the pundits will begin to call the "top of the market" as they have been doing for the last year. Yes, eventually they will be correct and a bigger sell-off will occur, however trying to pick the top is as difficult as it is to pick a bottom in the market.

My point I am trying to get across is that nearly every investor was searching for a pullback in the market to put more money to work and now that it is happening the same investors are running for the exits. I will sit here patiently and look to put client's money to work when I feel the selling is slowing and the market is on support and will actually buy into weakness - what a novel concept!