Dalton — The stock market often does whatever it must to frustrate the most people possible. Remember the other day, on June 11, when the stock markets dropped more than 5%? Yeah, no. Nobody does. One day, the world is ending, the following week and half and nobody remembers nuthin’. Not only was there little follow-through selling to the June 11 crash, but buyers stepped in to gain control of the action. At the time, I thought that might be the first 5% of an 8-16% decline, but absent a resurgence of COVID-19 that could keep businesses closed, we…
Insights & Advice
Tag: COVID-19
Less bad, but still bad
Dalton — After months of a powerful rally, last week, the stock market corrected a bit, with major averages dropping below their 200-day moving averages. Given that the stock market could be considered “overbought” by a variety of metrics, further consolidation is likely required before stock prices can regain their footing and continue their advance. I do expect stock market averages to continue their advance over the intermediate term. Sure, in the short term there should be some consolidation in prices. However, over longer periods stocks will generally perform better a) when the economic data goes from “bad” to “less bad,”…
Looking nifty at fifty
Dalton — Is it time to sell stocks because they’ve gone up so much? No. I don’t think so. Yes, we’re going to get a big correction. But, heck, we’re always going to get a big correction. Roughly three and a half times per year, the stock market corrects 5% from an intermediate-term top; about once every 14 months the stock market corrects more than 10%. Yet for more than a century, the U.S. stock market seems to keep finding new highs. Knowing that a correction is coming, whether it’s 5% or even 15%, doesn’t necessarily mean it makes sense to…
Dazed and confused
“I’d like to stop thinking of the present, like right now, as some minor, insignificant preamble to something else.” — Cynthia Dalton — During periods of high daily stock market volatility, it’s easy to get overly fixated on the short term and lose perspective on the longer-term dominant trends. I’ve been guilty of focusing on the short term, having sold equity going into the stock market crash in an effort to lessen portfolio declines even though, in my heart of hearts, I felt then and still feel the stock market will again see new highs. It will be a valuable exercise…