Is this opportunity or time to panic?
Every time the stock market goes into a correction, I look at this great stat by @RyanDetrick from 2015. (See table below)
Although the table above is a little outdated, the numbers are still similar today. The S&P 500 on Monday finished the trading session down -20% from all time highs. According to the data above, this has only happened about 17% of the time from the years 1960-2015. In other words, we are in some rare times as the S&P 500 doesn’t have corrections like this very often.
On Monday, December 24, 2018, the S&P 500 closed at 2351.10. This is down -20% from its all time highs in September. Here is a monthly chart of the S&P 500 going back to 1985. (See chart below)
This is the biggest correction in the S&P 500 since 2011. This feels more like a 2011 type market to me, but time will ultimately tell. Could there be some systemic risk out there that could cause this correction to get worse? Yes, but it’s important to remember the long term outlook for the stock market is incredible!
The final chart shows how incredible this decline has been thus far. (See chart below)
I leave you with some quotes to think about going forward from the great Sir John Templeton:
“If you never invest with borrowed money, then you can always be comfortable.”
“Have patience, be a long term investor. Be prepared financially and psychologically to live through a series of bull markets and bear markets. Because in the long run, common stocks will pay off enormously! The next bull market will carry share prices far higher than this one.”
Thank you for reading!
Disclaimer: Nothing in this blog should be taken as investment advice. You agree by reading this that any actions taken by reading this material is at the reader's discretion and the author (Robert Lesnicki) will not be held liable for any losses incurred. Any content in this blog is intended to be for entertainment/educational purposes only and is in no way a recommendation to buy or sell securities. Robert Lesnicki may hold positions in securities mentioned in this blog and may trade for his own account (s) based on the information presented. Stocks and options trading involves substantial risk of losses and is not suitable for every investor.
The “speculative portfolio” is made for entertainment/educational purposes only. Nothing in the “speculative portfolio” should be taken as investment advice. Securities mentioned in the “speculative portfolio" can lose value. Robert Lesnicki may hold positions in securities mentioned in the “speculative portfolio.” You agree that any trade/investment actions taken after reading information in the “speculative portfolio” is at the reader’s discretion and Robert Lesnicki will NOT be held liable for any losses incurred.
Most of the information on this blog is sourced from other websites. At times, the information provided may not be updated in a timely manner and may contain old or outdated information. The data may not be 100% accurate. It is up to the reader to verify and make sure that all information presented in this blog is whole and accurate. You agree, that by reading this, any actions taken based on information in this blog, is at the reader’s discretion and Robert Lesnicki will NOT be held liable for any losses incurred
DATA INFORMATION IS PROVIDED TO THE USERS “AS IS.”
NEITHER “Robert Lesnicki” , Robertlesnicki.com, NOR ITS AFFILIATES, NOR ANY THIRD PARTY DATA PROVIDER MAKE ANY EXPRESS OR IMPLIED WARRANTIES OF ANY KIND REGARDING THE DATA INFORMATION, INCLUDING, WITHOUT LIMITATION, ANY WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE.
CFTC RULE 4.41 – HYPOTHETICAL OR SIMULATED PERFORMANCE RESULTS HAVE CERTAIN LIMITATIONS. UNLIKE AN ACTUAL PERFORMANCE RECORD, SIMULATED RESULTS DO NOT REPRESENT ACTUAL TRADING. ALSO, SINCE THE TRADES HAVE NOT BEEN EXECUTED, THE RESULTS MAY HAVE UNDER-OR-OVER COMPENSATED FOR THE IMPACT, IF ANY, OF CERTAIN MARKET FACTORS, SUCH AS LACK OF LIQUIDITY. SIMULATED TRADING PROGRAMS IN GENERAL ARE ALSO SUBJECT TO THE FACT THAT THEY ARE DESIGNED WITH THE BENEFIT OF HINDSIGHT. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFIT OR LOSSES SIMILAR TO THOSE SHOWN.
This is NOT a trade recommendation. Robert Lesnicki is NOT, and DOES NOT claim to be a financial advisor. Please consult your financial advisor before making any investment decision. Securities mentioned in this post can lose value and essentially go to 0.