From the low point in early April, the S&P 500 has risen more than 32%:
The Nasdaq 100 is up nearly 42% from its lows.
Since early June, the stock market hasn’t even experienced a 3% decline.
Volatility in April was intense, but since then the market has been easy – up and to the right.
On Friday, the stock market fell about 3% that day. The reason is irrelevant.
Big down days are normal regardless of the market environment:
Even when the stock market is rising, there are plenty of bad days. About 12% of all trading days in a given year experience a loss of 1% or worse.
Since 1950, a 5% correction has occurred on average about once a year:
A double-digit decline has occurred once every three years.
If you’ve been reading this blog for a while, these statistics won’t come as a surprise.
I find it helpful to regularly remind yourself of how the stock market works, especially when things seem too easy.
I don’t know if this is the start of an actual correction or just a blip. Every downturn has to start somewhere, but most bad days don’t turn into even worse times.
However, it is always a good idea to keep an open mind because the stock market can be so unpredictable.
The stock market goes up more often than it goes down, but you have to respect the possibility of loss.
Stocks sometimes fall too.
Further reading:
Buy when the stock market drops 15%
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