The last of my housefull of holiday company leaves today, so I’ll be back in the saddle tomorrow. Since I’m still out today, I’ve included links to a couple of interesting articles you may enjoy reading, especially in light of the current stock market plunge.
The first article suggests that the current stock market blowout is probably not signaling a new recession just ahead. That assumes, of course, that this sharp decline ends soon and merely qualifies as a “correction.” This may well happen since the S&P 500 Index as of Monday was the most oversold it’s been since early 2009 at the end of the Great Recession.
This would be a good article to forward to your adult children who may not have seen the market plunge like this before. Here’s the link:
Does the Stock Market Sell-off Mean a Recession is Coming?
The second article is from one of my favorite writers, Mark Hulbert, a senior columnist for MarketWatch and the founder of the Hulbert Financial Digest which tracks the performance of investment newsletters. Mark points out that bear markets historically start off slowly in the beginning and build up momentum over several months before falling precipitously.
He notes that over the last 80 years in the first three months of bear markets, there was an average loss of 9%. The current stock market lost more than double that in the first three months, with the S&P 500 Index falling by 19.8% at the low. For this reason and others, Hulbert believes this is a correction, not the beginning of a bear market. Of course, he could be wrong.
This Still Looks Like a Stock Market Correction, Not Something Worse
In closing, I hope everyone had a wonderful Christmas! We certainly did. Now it’s on to the New Year and hopefully, it will be a better one!
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