| Not One, or Two, But FIVE Corrections of 10% Are Possible | | By Dr. Steve Sjuggerud | | Monday, February 5, 2018 |
| "This market is way overbought – a correction is coming!"
We've heard that for weeks. I'm tired of it!
It's not because it's wrong... but because, my friend, OF COURSE a correction is coming!
That is not a bold prediction. It is a simple fact...
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The simple truth is that stock markets have corrections. (Corrections are typically defined as a fall of 10% from new highs.) If you can't handle that, then don't invest.
The big question now is, could we see a correction during the current stock market "Melt Up"?
Of course!
But if we see a 10% correction during this Melt Up, would that mean the Melt Up is over?
NO!
I say this so emphatically because of this fact:
During the last great Melt Up in stocks – the dot-com boom of the late 1990s – the Nasdaq Composite Index actually saw five roughly 10% declines during its final push higher.
Take a look...
These falls were quick. They all happened in a month or less.
But don't think they weren't painful... A 10% fall in the broad index definitely meant larger declines in the more volatile stocks. During the worst of those corrections, you had to question if staying on board was the right move.
These days, folks are used to a one-way market... They will certainly panic in a correction.
My message today is DON'T PANIC. Corrections are normal – even in the Melt Up phase of a stock market boom.
So please, don't be surprised if the market falls 10% this year. Based on history, it could even happen more than once.
The next correction will be painful. It will feel terrible. But don't panic. A correction (or two, or more) does not signal the end of the Melt Up.
Good investing,
Steve |
NEW HIGHS OF NOTE LAST WEEK Northrop Grumman (NOC)... "offense" contractor Lockheed Martin (LMT)... "offense" contractor Roper Technologies (ROP)... diversified engineering Thermo Fisher Scientific (TMO)... life-sciences giant Amazon (AMZN)... "FANG" stock Mastercard (MA)... credit cards Choice Hotels (CHH)... hotels Carnival (CCL)... cruises Ferrari (RACE)... fast cars Blue Buffalo Pet Products (BUFF)... pet foodDollar Tree (DLTR)... discount retailer Take-Two Interactive (TTWO)... video games Electronic Arts (EA)... video games New York Times (NYT)... global news coverage Skechers (SKX)... shoes and accessories
NEW LOWS OF NOTE LAST WEEK TiVo (TIVO)... digital-video recording Barnes & Noble (BKS)... bookstores Brixmor Property (BRX)... shopping center REIT Washington Prime (WPG)... shopping center REIT Nordic American Tankers (NAT)... oil tankers |
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| 1,000% upside? It's possible in this sector... The "Melt Up" is in place. And while the road ahead could be bumpy, the general direction for stocks is up. With that in mind, we're seeing an opportunity in an often-forgotten corner of the market... |
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| 'Buyer's Remorse' Is Losing You Money – Here's How to Beat It | | By Kim Iskyan | | Friday, February 2, 2018 |
| | Controlling these emotions can mean the difference between making a good investment... and one that you'll both regret and lose money on... |
| | How the Unemployment Rate Predicts Stock Market Crashes | | By Dr. Steve Sjuggerud | | Thursday, February 1, 2018 |
| | Jobless claims recently hit a 45-year low. And as stock investors, we can learn a ton from the unemployment rate... |
| | How to Diversify With Four Unique Real Estate Investments | | By Peter Churchouse | | Wednesday, January 31, 2018 |
| | If you want to profit from real estate stocks, you need to know one important thing... |
| | Why a Great Economy Means Bad Stock Returns | | By Dr. Steve Sjuggerud | | Tuesday, January 30, 2018 |
| | A great economy is typically bad for the stock market going forward... |
| | This 'Easy' Decision Could Sink Your Portfolio | | By Dr. Steve Sjuggerud | | Monday, January 29, 2018 |
| | When you buy a stock, how do you decide how many shares you'll buy? |
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