As you already know the stock market is, at the very least, in a correction. Bespoke Invest notes:
Nasdaq correction now at 16.9%. pic.twitter.com/KRODklN5ZD
— Bespoke (@bespokeinvest) January 24, 2022
My colleagues at Ritholtz Wealth Management have been writing furiously the past few days to help put some of this into some context. In no particular order, some things to mull over amid the market carnage.*
*Updated with most recent posts (1/25).
Joshua Brown
- "There are some folks who want to sell and some who have to sell. You can’t discern the difference by watching the action in any particular stock. Red is red, doesn’t matter why." (thereformedbroker.com)
- "So, if you’ve committed to riding this out rather than panicking, good for you. You’ve made the right choice. Now what? Try to make this decision easier to live with...Close your laptop. Stop checking prices. Log out of that f***ing brokerage app." (thereformedbroker.com)
Michael Batnick
- "Ignore all the predictions about where sentiment is, where prices might bottom, and where we go from here. The truth is that we’ll only know we’re at the bottom when prices stop going down and start going up." (theirrelevantinvestor.com)
- "It’s hard to stay optimistic when you’re losing money." (theirrelevantinvestor.com)
Ben Carlson
- "The pendulum always swings too far in both directions, especially when technological innovation is involved. In 2020 and early-2021 that pendulum went too far to the upside." (awealthofcommonsense.com)
- "Bear markets and crashes are rare. If history is any guide, there is a higher probability this is simply a regular correction as opposed to the end of the world. But a bear market is always possible when humans are involved in the equation." (awealthofcommonsense.com)
- "The perfect portfolio is worthless if you can’t stick to it when things are going poorly. It’s during a correction that you figure out whether you built a portfolio that suits your personal risk profile, time horizon and personality or someone else’s." (awealthofcommonsense.com)
Barry Ritholtz
- "For the past decade, the cost of Capital has been essentially free. This has stimulated the economy, encouraged more debt-based consumption, and enhanced corporate profits. This period is ending." (ritholtz.com)
- "Truly understand the forces at work on people’s psyches during a crash is not easy. It is similar to warfare: perhaps you can imagine what it’s like, but only those who have lived through it truly understand the intensity and magnitude of the experience." (ritholtz.com)
