Over the last decade we have been in a significant bull market, with the market increasing more than 350% since the 2009 lows. But this hasn’t been a smooth ride.
Since 2009, we experienced six corrections. These were all temporary market losses ranging from a loss of 10% to a loss of more than 33% during the CoronaCrash.
Interestingly, not a single one of those corrections was predicted by Wall Street.
But Wall Street, as usual, did predict pullbacks that never happened. Pull backs, recessions and market crashes are a dime a dozen. They are predicted, but they never seem to predict the ones that actually occur.
Wall Street has been talking about the market being overvalued for some time now, which story continues even today. Last August, a headline printed in Forbes that the market was overvalued by 77%. That seems severe! Since that headline, the market is up over 33%.1
Big fluctuations, uncertainty, and woeful predictions are natural events of capital markets, and occur even within bull markets. We should expect them.
This is why some of the best investing advice I provide is to ensure your financial decisions are based on your plan, and not the concern of the day.
1.Source: Forbes, August 18, 2020. Performance based on S&P 500 Index from 8/18/20 – 8/29/21. Includes dividends reinvested. The Standard & Poor’s 500 Index is a capitalization weighted index of 500 stocks designed to measure performance of the broad domestic economy through changes in the aggregate market value of 500 stocks representing all major industries. All indices are unmanaged and may not be invested into directly.