Anyone who has been watching the news lately knows that the markets have had a really rough week. Tonight, when you turn on the news, you might hear people mention the word “correction” in reference to what’s happened in the market lately.
Sometimes the financial news media can tend to sensationalize negative market news because let’s face it — bad news attracts viewers, and viewers attract advertising revenue. But to be fair, we came across this outstanding article on CNBC.com discussing what a correction is, as well as defining several other terms that you might hear about this market. We strongly urge anyone reading this note to click on this link and read the article.
Now that you’ve read up on the topic of corrections in the stock market, you know that they are a difficult — but sometimes necessary — part of a normally functioning stock market. According to statistics from S&P Capital IQ, a correction tends to happen about once every 18 months, yet we had not seen one (before today) since October 2011. Here’s another great article from CNN Money wondering if we would finally get that overdue correction. The article was written in August — LAST August — and wondered whether the S&P 500 would dip below 1930. As we now know, we never quite got that correction last August, and the S&P 500 currently sits at 1970 (40 points higher than a year ago) after today’s rough close.
We seem to have arrived at the long-awaited correction, so the big question is, “Now What?” That’s something we can’t answer in a blog post, but if you have questions about your current investment holdings, strategy, or anything you see on the news, we’re here for you to help find answers to all of those questions. Please give us a call at 800-281-3980.
We hope you have a great weekend, and thanks for reading.
Carl Beck
8/21/15