Why Was The Market Down Today?

Unless you’re a professional money manager, you don’t watch every minute of the stock market.  Most of us have full time careers, lives, etc. that keep us busy.

However, if you happened to check your brokerage account today, you might be wondering: “What the hell happened today?!?!?!”

What seems to have happened, for one, is the market is not so confident in this so-called trade truce between the US and China.  It breeds uncertainty.  The markets hate uncertainty.

There is also talk of the Federal Reserve raising interest rates.  I am going to discuss this in greater detail tomorrow.

What is important to remember is this: when you’re a buy and hold investor, headline items like this don’t mean that much to you.  Just keep holding on to what you have, and take advantage of times like these to add to your positions in good companies at a discounted rate!

 

Will We Have A Bear Market In 2019?

bear market 2019

Photo: Eve Livesey.  

Good morning.

“Are we in a bear market?”

“What should I do if we’re in a bear market?”

As the end of the year approaches, you will start to see many financial newsletters calling for a bear market in 2019…especially considering the way the second half of this year has gone.

Throw in the potential Fed rate hikes, as well as the trade spat with China (reportedly resolved as of yesterday, but who knows?), and you have a recipe for a recession – which could lead to a bear market.

The truth of the matter is that no one knows for sure as to what next year will bring.  I wouldn’t be surprised to see the market continue to move higher, and a bear market wouldn’t shock me either.

The last bear market we had was between 2008 and 2009.  It lasted for 15 months.  Since the 1930s, the U.S. stock market has had eight bear markets, lasting 1.4 years on average.

So what should you do if there’s a bear market?

It depends.  If you need your money in the next three years, you should probably take it out of the market.  If this year has taught you anything, it’s that you never know when a market sell-off is going to happen.

If your time frame is more long-term, which I hope is the case, then do nothing.  If you are a regular investor, and you have a fixed amount that you invest each month, then continue to do so.  If we have a bear market, you will have bought stocks at some very good prices.  Do not listen to the pundits that tell people to jump in and out of the market because they believe a bear market is coming.  I said it before and I’ll say it again: it is impossible to successfully time the market.

We here at Wealthy Joe are long-term investors.  We don’t let a sell-off or bear market scare us out of owning great businesses for the long term.

 

Hell No…Stocks Will Grow!

“Should I stay in the stock market?”

I want to take this time to check in, because I’ve been seeing and hearing this question a lot lately…

The last two months have been very, very difficult to say the least.  My account was down as much as 35% at one point.  That did not feel good.

However, I’m more concerned about you.  If you are brand new to investing, you may be shell shocked.

Listen…like I’ve said in the past, and explained in my intro guide, this is all part of investing.  The only run that matters is the long run.  Remember that.

The answer to “Should I sell my stock?” or “Should I get out of the stock market?” is: “HELL NO!  STOCKS WILL GROW!!”

It’s important to know that the downward pressure is not over.  At least I don’t believe it is.  Be that as it may, though, that’s ok.  Because we’re ready!!!

How Long Do Stock Market Corrections Last?

Hi, friends.  A short post this evening, as we in the U.S. ease into the Thanksgiving holiday…

So…corrections.  What are they?  Are we in the midst of one?  How long do they last?

The definition of a correction is when a stock market average drops by 10% from its high.

Currently the Dow is down around 7%, the S&P 500 is down 8.5%, and the NASDAQ is down 13%.  So yes – we are in what can be termed a correction.

How long can we expect this downturn to last?  It’s impossible to know for sure, but if history is our guide, the typical correction lasts three to four months.  When you consider that the market peaked in late August, we will probably be in sell mode for the rest of the year.

Stay the course.  Buy and hold.  You’ll be glad you did!

I wish all of those celebrating a happy and safe Thanksgiving Day!

 

No One Said It Would Be Easy!

So we have been in a sell-off for three weeks now.

It hasn’t been fun.

Did you know it’s been found that investors feel the pain of losses more than they feel good when the market goes up?  It’s true.  That’s the way we’re wired.

If you’re new to investing, you might be kicking yourself right now for ever getting in the stock market – if you haven’t already sold by now.

Well, listen to me.  OK?  No one said this was going to be easyemotionally, that is.

Here is what I try to remember on days like today…

I am a huge follower of David Gardner from The Motley Fool.  Don’t know him?  Well, he is one of the best investors over the last 25 years that you’ve never heard of.

David Gardner has been fully invested over that time frame.   Occasionally, yes, he has made some missteps.  Over his career, though, he has beat the market by over 500%.

Yes.  That’s right.  500%!  And guess what?  When he evaluated every pick he ever made, he concluded that his percentage would be even better if he had never sold a share.

Hang in there, friends.   Don’t give up.  We’ll get through this together.