Citations:
Pixabay
https://www.washingtonpost.com/opinions/2022/05/06/stock-market-decline-not-all-bad-news/
After a harrowing week in the stock market with days falling hundreds of points one of which was over a thousand points I had to stop and clear my head. it's hard to have to readjust your expectations after so many great years of winds since 2020 we have seen amazing gains and now we may have to deal with a reckoning.
Major indices that have brought me money and returns for years including the NASDAQ and DJIA turned. After meme stocks crash after our big hitters crashed and the blue chips crashed it was really humbling. Humility is a good thing, as it can help us to learn. The stock market returns about 8% on average historically, and the past 2-years have given us 3-4 times that return. Interest rates have been low as well, so borrowing money to invest and buy real estate have been a gift.
The market has been turbulent lately and we become spoiled after 10 years of a bull market towards the upside. The NASDAQ is down almost 25% year-to-date and this is far off from the returns we've seen from the FANG stocks since 2008. The rise of the FANG stocks was a gift to investors, and the pullback can be an inflection point. Is it time to buy or sell and take gains long overdue?
the market could return to the mean or the market could crash I don't like to use the word crash though to describe the price action. reversion to the mean means that we have to reset our expectations of what the market can deliver.
the good news is the stock market really is the place to be it's the place to build wealth. The NASDAQ is down the Dow is down but after so many years of gains we can expect these things. It's time to take stock of our current reality, hold cash for further crashed and buy quality names. For me, I am lacing my gloves back on and cautiously buying quality. The market is down but it's far from out, and after so many years of returns, giving up now sounds foolish, but caution is advisable.
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