Big, scary stock market sell-offs happen all the time in bull markets
The markets have been getting rocked this week.
Stocks in the US were lower for a fourth day on Friday following Thursday's brutal sell-off. The Dow was down as much as 291 points Friday with all 30 Dow stocks lower. The S&P 500 briefly dropped below 2,000 for the first time since February (all of it sectors were in the red).
Friday's intra-day low of 1,993 on the S&P represents a 6.6% drop from its intra-year high of 2,134.
So, is it time to panic?
It's important to note that big sell-offs occur all the time, even during years when the markets are surging. For what it's worth, even the Black Monday crash of 1987 was part of a bull market.
"Despite average intra-year drops of 14.2%, annual returns [have been] positive in 27 of 35 years," JP Morgan Funds' David Kelly recently noted.
Kelly offers this chart of intra-year declines that we think every investor should take a good look at.
The bottom line is: Sell-offs happen. Sometimes they're big. But they're normal, so there's no reason to panic.
Yet.
JP Morgan
- Volumes up, values down: India's deal-making marks notable shifts in April
- 10 best kid-friendly summer vacation destinations in India
- “Are you accusing me of bullying the US?” jokes EAM S Jaishankar when asked about India-US relations
- As rain and snow events become more intense, so could our earthquakes, study finds
- India-EU FTA 'most difficult, complex' due to non-trade issues: EAM Jaishankar
- Nothing Phone (2a) blue edition launched
- JNK India IPO allotment date
- JioCinema New Plans
- Realme Narzo 70 Launched
- Apple Let Loose event
- Elon Musk Apology
- RIL cash flows
- Charlie Munger
- Feedbank IPO allotment
- Tata IPO allotment
- Most generous retirement plans
- Broadcom lays off
- Cibil Score vs Cibil Report
- Birla and Bajaj in top Richest
- Nestle Sept 2023 report
- India Equity Market