As the week comes to a close it looks like stocks will have their worst week since 2011. Global stocks have dipped into the negative territory for the year and people might be panic selling. I see that as a very bad move for the typical long-term investor. Is this the beginning of the next prolonged bear market drop of more than 20%? It certainly could be, but I doubt it. The sudden (seemingly from nowhere) sharp drop of the market this week smells like a classic correction. Having a correction within the course of a year is typical. Trying to time corrections is impossible and will only lead to underperformance.

Remember that volatility is good for long-term growth, it is one of the reasons we get superior long-term performance from stocks vs. say bonds.

One quick positive indicator for this bull market to continue is that I currently see 7 articles on www.realclearmarkets.com with headlines pointing to the eminent demise of the market. That is an unscientific indicator that sentiment is not at “danger zone” euphoric levels.

I always like a good correction, it helps weed out the weaker investors.

– Wyatt Swartz

– 8/21/2015