It was another bloody day in the US stock market
The days of excess is over if you haven't realised it by now. The interest rate regime change and Quantitative Tightening were pivotal moments. I have talked about the issues in preceding posts so I shall not repeat here. Or you can watch the video here: https://youtu.be/PhoIhZymU_c
Let's just do a damage assessment of the US stock market. S&P 500 was down 16% in the first 88 days. It is the second worst start in history, just better than 1932 where the US was suffering from the Great Depression.
There were just 5 other times that S&P 500 lost more than 10% in the first 88 days of the year. 4 out of these 5 occasions saw positive returns for the rest of the year but 3 occasions still ended the year with a negative return.
The above observations were derived from stats posted by @charliebilello (Twitter).
Nasdaq 100 is down 27% from the peak. It made a new 1-year low. The current price level is similar to that on 5 Mar 2021.
Here are some familiar stocks that have performed badly year-to-date:
Disney -31%
Nike -33%
Amazon -35%
Starbucks -37%
AMD -40%
Meta -42%
Nvidia -42%
Zoom -50%
PayPal -58%
Spotify -61%
Grab -61%
Sea -71%
Netflix -71%
Shopify -75%
Cathie Wood's ARK Innovation ETF has lost 74% from the peak, essentially giving back all the Covid gains to the markets. Dropping another 22% would bring it back to its Covid low.
A positive sign - every time CNBC runs it "Markets in Turmoil" special, the S&P 500 delivers great returns after that. It is a perfect record since 2010. Thanks to @charliebilello again - https://twitter.com/charliebilello/status/1522565809708711936?s=20&t=6WqxkGzMiweAe8NGZjm9Mw
The bigger question is what you should do. I am not a financial advisor and I don't know your situation. But here're what I think is sensible.
If you have a lot of US stocks, review your portfolio and see which stocks are meant for long term and which are just punts. Hold the long-term and sell those punts.
If you have been buying US stocks regularly, continue to buy.
If you are thinking of buying US stocks, break up the lump sum into smaller parts and dollar cost average.
For more elaborate 10 ways to handle a market crash, refer to https://www.facebook.com/groups/2294445933927152/posts/5083453275026390/
Let's just do a damage assessment of the US stock market. S&P 500 was down 16% in the first 88 days. It is the second worst start in history, just better than 1932 where the US was suffering from the Great Depression.
There were just 5 other times that S&P 500 lost more than 10% in the first 88 days of the year. 4 out of these 5 occasions saw positive returns for the rest of the year but 3 occasions still ended the year with a negative return.
The above observations were derived from stats posted by @charliebilello (Twitter).
Nasdaq 100 is down 27% from the peak. It made a new 1-year low. The current price level is similar to that on 5 Mar 2021.
Here are some familiar stocks that have performed badly year-to-date:
Disney -31%
Nike -33%
Amazon -35%
Starbucks -37%
AMD -40%
Meta -42%
Nvidia -42%
Zoom -50%
PayPal -58%
Spotify -61%
Grab -61%
Sea -71%
Netflix -71%
Shopify -75%
Cathie Wood's ARK Innovation ETF has lost 74% from the peak, essentially giving back all the Covid gains to the markets. Dropping another 22% would bring it back to its Covid low.
A positive sign - every time CNBC runs it "Markets in Turmoil" special, the S&P 500 delivers great returns after that. It is a perfect record since 2010. Thanks to @charliebilello again - https://twitter.com/charliebilello/status/1522565809708711936?s=20&t=6WqxkGzMiweAe8NGZjm9Mw
The bigger question is what you should do. I am not a financial advisor and I don't know your situation. But here're what I think is sensible.
If you have a lot of US stocks, review your portfolio and see which stocks are meant for long term and which are just punts. Hold the long-term and sell those punts.
If you have been buying US stocks regularly, continue to buy.
If you are thinking of buying US stocks, break up the lump sum into smaller parts and dollar cost average.
For more elaborate 10 ways to handle a market crash, refer to https://www.facebook.com/groups/2294445933927152/posts/5083453275026390/
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