WOW, have investors gotten bearish.
A month ago, everyone on the planet was talking about new all-time highs for the stock market and big tech was the only game in town.
Fast forward to today, and Nvidia (NVDA) is down 20%, and I see gurus calling for a new bear market in stocks. And bear in mind… the S&P 500 is down just ~5%… after rallying 40% in just eight months!
This is the problem with being bearish. Sure, you will be right once a decade or so… but, 99% of the time, panicking is a colossal mistake.
Why?
Because over the long-term, stocks go up and go up a LOT. As in 1,000s of percentage points.
Moreover, market dips/ pullbacks are quite common.
Consider that stocks will typically pull back 5%+ three or four times every year. Larger drops aren’t that uncommon either: the market corrected 10% or more in HALF of the 20 years from 2002-2021.
Anyone who panicked and sold the farm when that happened ended up missing out in a big way!
As Charles Schwab notes, since 1974, the S&P 500 has risen an average of more than 8% one month after a market correction bottom and more than 24% one year later.
Put simply, panicking or getting overly bearish simply because stocks are correcting is a MASSIVE mistake for the simple reason that pullbacks/ dips are quite common even during raging bull markets!
Thus, investors are in a quandary.
One the one hand, corrections are common events in which you should “buy the dip.” But on the other hand, once every 10 years or so, a REAL crash/ bear market will hit that will wipe out years’ worth of gains!
So obviously, investors need a tool for determining whether stocks are simply correcting in the context of a bull market… or if a legitimate crash/ bear market is about to unfold.
I’ve developed a tool that takes ALL of the guessing work out of this problem. With just one look at this tool, you can tell whether it’s a good time to buy stocks or not. I detail it, along with what it’s currently saying about the market today in a Special Investment Report How to Predict a Crash.
To pick up a free copy, swing by
Best Regards
Graham Summers, MBA
Chief Market Strategist
