This Doesn't Happen Often - VI

| February 02, 2018
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One of the biggest concerns investors have today is when will the markets drop and by how much.

I tell them that the next bear market catalyst is predicated on the rate of change of US growth (GDP and Profits) and Inflation.

However, we should expect volatility. Typically we see a 14% intra-year pullback on average dating back to 1990.

But based on history, we typically don’t see bear markets start after a parabolic move higher.

Thursday was the 570th day since the S&P 500 has been down that far, according to Sam Stovall, CFRA Inc.’s chief investment strategist.

Stovall cited 10 other post-World War II periods that lasted at least 250 days in a report Monday.

Six were followed by losses of less than 10%, a common threshold for corrections.

Only one, starting in December 1961, exceeded the 20 percent level for a bear market.

Based on this data point and our research we should expect a healthy, normal correction but that will not necessarily turn into a bear market.

 

Stay Tuned, Disciplined & Patient! {TJM}

ICE – Investor & Character Equation | S + R = O

 

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