On The One Hand…

On the one hand, this doesn’t look normal:

Stocks basically had a flash correction from all-time highs, rebounded a decent chunk of those losses, and have now continued falling into correction territory.

On the other hand, there is no playbook for stock market corrections and bear markets. Assuming markets are going to follow the same script they did in the past is an easy way to look foolish.

On the one hand, the S&P 500 closed Friday’s session at 2,588, a level it first passed through in November.

On the other hand, stocks were going up at that time whereas now they’re going down ($STUDY).

On the one hand, the S&P 500 is in the midst of a 9.9% drawdown.

On the other hand, the S&P 500 is down just 9.9% from its all-time high. All-time, as in the highest level it’s ever been in history.

On the one hand, the U.S. stock market has risen 9 years in a row.

On the other hand, it’s never fun to lose money because losses are painful.

On the one hand, there are few signs the U.S. economy is entering a recession.

On the other hand, there are plenty of instances where stocks have seen massive corrections outside of an economic contraction.

On the one hand, the S&P 500 was down 3.6% in February and 4.6% so far in March.

On the other hand, the S&P 500 is down a little less than 3% on the year.

On the one hand, every bear market has to begin from a market peak.

On the other hand, every correction doesn’t have to turn into a crash.

On the one hand, the first season Atlanta on FX was one of the funniest, most original TV shows I’ve seen in years.

On the other hand, the second episode of season two may have been better than any episode from the first season. I was worried about a sophomore slump with this one but so far so good for the second season for Donald Glover.

On the one hand, volatility tends to cluster in the stock market as investors begin to panic more freely when they see their portfolio market value falling.

On the other hand, investors have been spoiled the past few years with low volatility in the markets. We were overdue for this type of environment.

On the one hand, Ladybird was one of the best movies of the past year or so.

On the other hand, the quality of movies over the past decade or so has fallen off a cliff. So I can’t tell if this is a great movie or just a decent movie in a sea comic book sequels.

On the one hand, there will surely be a bull market in opinions in the days and weeks ahead as pundits and investors alike try to guide you through the turmoil in the markets and tell you exactly how things will transpire.

On the other hand, no one has a clue what’s going to happen with the short-term gyrations of the stock market.

On the one hand, it’s more fun when stocks go up and to the right in a straight line.

On the other handto win in the stock market you have to be willing to lose at times. Rewards do not exist without risk.

On the one hand, the nacho cheese fries from Taco Bell look delicious after viewing them roughly 159 times during March Madness commercials.

On the other hand, they’re french fries from Taco Bell. Do I really want to take that chance? (Who am I kidding — I’m going to try these eventually).

On the one hand, it appears the president is starting an unprovoked trade war. Anytime the word ‘war’ is used in the description of something, that’s usually a bad sign.

On the other hand, the global economy is massive with millions of moving parts and variables. This doesn’t seem like a great idea when everything was going so well but it will take time to sort through the ramifications.

On the one hand, Facebook is one of the biggest stocks in the S&P 500 and is now down close to 18% from its all-time highs amidst growing backlash on how they’ve handled user information.

On the other hand, Facebook makes up just under 1.8% of the S&P 500. One stock does not make or break a market.

On the one hand, the average intra-year drawdown for stocks is roughly 14% since 1950.

On the other hand, our experience in the markets is anything but average in any given year.

On the one hand, buy and hold is a wonderful strategy when stocks are rocking.

On the other hand, the hold part of the equation becomes difficult during a reversal of fortune.

On the one hand, it would be easy for me to assure you everything will be just fine and the markets will surely hit new all-time highs in no time.

On the other hand, I have no idea what’s going to happen as continued losses or an eventual reversal for the remainder of the year wouldn’t surprise me. Markets are always surprising. The trick is to never be surprised that you’re surprised.

 

 
Download PDF

Full Disclosure: Nothing on this site should ever be considered to be advice, research or an invitation to buy or sell any securities, please see my Terms & Conditions page for a full disclaimer.