Friends
For many investors this is their first bear market experience. It is very painful and stressful. As I mentioned a few months ago this is my 9th bear market, at least by the definition of the S&P 500 going down 20% or more. When you’re in the middle of a bear market you have no idea how far stocks will fall and how long the experience will last. Each one comes with its own set of circumstances and each one feels like it’s so bad this time we may never recover (for a while during the financial crisis of 2008 it appeared that the whole system might collapse). As messed up as our economy sometimes looks, and as messed up as our politics often times looks, we still have a capitalist system that despite ups and downs, is able to survive and recover from setbacks. Yes, by nature I tend to be optimistic, but we have been forthcoming and frank about the current market situation. We have outlined the monetary and fiscal mistakes made that have gotten us to this point. We have said that this bear market was going to take time to unfold, making it different than recent declines. Bear markets are a gift to young investors. It allows them to buy wonderful companies at very reduced prices. For folks in the later stages of their investing life bear markets can be especially disconcerting. That’s why planning and patience are key to surviving bear markets and thriving in future bull markets. Though it feels like much more, this bear market is pretty ordinary to this point. It might get worse, and it might take more time before we turn the corner. But not betting against America, capitalism and corporate America in the long run has always paid off. It will again.
Today was a difficult day for most asset classes. Stocks were down, gold was down, oil was down, and bonds were down early but mixed by the close. For the day, the Dow Jones Industrial Average was down 483 points to close at 29,592. The S&P 500 was down 64 points to finish the day at 3,693. The Nasdaq Composite Index was down 198 points to close at 10,867. Gold was down $29 to trade at $1,651per ounce, while oil was down $4.40 to trade at $79.09 per barrel WTI.
Added to all the disruption this week is the fact that we are in a seasonally difficult time for stocks. But, as we work through the coming weeks, we will begin to enter a period where the mid-term elections will come into focus and then a typically seasonally good time for stocks. Let us know if you would like us to do a zoom broadcast next week or beyond. I write most every day, but maybe you would like to see us on screen. In the meantime,…
Have a great weekend everyone.
