The stock markets of the world turned in stellar results in 2013, and it was almost guaranteed that at some point there would be a pullback. Looking domestically, the S&P 500 reached a recent high of 1848.38 on January 15th, and in the period of a few weeks, is now down to 1741.89. This represents a decline of 106.49 or about -5.8%. Interestingly, this marks the 19th pullback of 5% or more in this current bull market (which began in 2009) according to USA Today.
The reasons for the pullback are varied, but it appears to be mostly from concerns over growth domestically and issues with the emerging markets worldwide. If nothing else, it has simply been too good for too long, and investors took the opportunity to play it safe and take profits on their 2013 gains.
From our perspective, small pullbacks or even corrections are a natural part of a long-term bull market. A bear market (a decline of 20% or more) is our primary concern, and they are usually spawned in an economic retraction. At current, the economies of the world are still growing, albeit slowly, and there is little inflation requiring intervention by the central banks. The result is that we remain optimistic about the future, while recognizing that there will be a degree of volatility over the near-term.