Please find this month’s Market Commentary newsletter which contains our view on the stock market based upon fundamental and technical analysis along with some recommended investments for the current market.
Since 1927, or right before the big crash, the stock market has averaged a mid-single-digit retreat about 3-4 times a year. Specifically, the market has averaged a 5% pullback every 3 ½ months, which is about 70 trading days. A correction is a decline of 10% or more, up to the 20% that constitutes a bear market. The US stock market has averaged a correction about once a year, lasting about 71 trading days before the market returns to pre-correction levels. Forget 5% or 10% pullbacks: as of writing, the S&P 500 has now gone more than 90 days without a 1% pullback, the longest such streak in 11 years. We feel that a selloff of a few percentage points over a few days would not be a bad thing at this point. Without such episodes in which stocks can blow off a little steam, the market could be vulnerable to a much worse response to any bad news; and there is always some kind of bad news ahead.