A stock-picker’s goal is always to buy low and sell high.
While the S&P 500 is down more than 20% since setting a record in January, it’s important to remember that the long-term total return average of the index is 10%. But remember, long-term investors shouldn’t get too caught up in one month’s or one quarter’s worth of inflation data. If it remains high, the Fed will stay the course. Of course, we are going to be closely watching all inflation data going forward. What makes this even more painful is the fact that they missed the bull’s-eye they should have been raising rates at this time last year.
That is a big reason why the S&P 500 was up 28% over the past three years. monetary and fiscal policies - was injected into the system. Over the past three years, an enormous amount of liquidity - from both U.S. Let’s remember what contributed to the current environment. dollar, rising rates around the globe and so many unknowns. None of this is surprising given the current backdrop of an uber-hawkish Fed, a surging U.S. Meanwhile, the Nasdaq has fallen more than 30% since hitting a record last November. But here is what we do know: The S&P 500 has now fallen more than 20% below its record set in January, while the Dow Jones Industrial Average is also down more than 20% below its all-time high. Is this a new bottom? We can never know for sure. Last week, the Cboe Volatility Index ( VIX), which measures fear levels on Wall Street, hit its highest level since mid-June, when the stock market last reached its bear bottom. The ongoing doom and gloom created by soaring inflation, the Fed’s promise to attack it and recession worries have only intensified. September is living up to its reputation for being the “worst month of the year” for stocks.
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