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Market Correction!!! What Do I Do Now?

If I seem a little off today, the CDC says I may be exhibiting an asymptotic broken arm.  Feels fine.  But I think I’ll get it x-rayed just in case.  Don’t want to set a bad example to society.  And just to protect you, because it won’t protect me, I’ll get a cast.  

And then you can sign it as a signal of our solidarity against asymptomatic arm separation syndrome or AASS as the CDC calls it.

If we could have only casted and immobilized the market the last two months, we could’ve avoided the symptoms of a bear market.  But that would be like telling a dog not to bark when we know that’s what a dog does.

For the first time since March of 2020, the S&P 500 officially corrected.  That means it fell 10% or more from recent highs.

And correct and bear is what a market does.  It’s part of its makeup.  It’s what it is.  Nothing unusual.  Nothing to see here.  Since 1950 the market averages three 5% market pullbacks and one correction of 10-percent or more.

But for the fun of it, we’ll peek at the score line.

All the major gauges taking a 3-percent spill in February.  All except for the small company index, the Russell 2k.

The S&P 500 slipping 3% last month.  If you include January, the index is off 8% so far in 2020.

The media’s favorite barometer, the Dow Jones Industrial Index, was off 3.5% in February.  And nearly double that for the 2-month stretch year to date.

NASDAQ off 3.4% for February.  And the hardest hit year to date, down 12% this year.

And I mentioned Russell turned in a relatively good month, at least a touch into the green.  But still hurting on the two-month scorecard, off nearly 9%.

What does all that mean for the future?  Nothing.  It’s historical.  We have no way of knowing what will happen going forward in the near term.

But if it makes you feel any better, stocks usually do well following market corrections.  Since 1980, the 500 had positive returns 90% of the time in the year after the correction.

We don’t set our financial sights on last month, this month, or next month.  We look out to next year, 3-years, 5-years and beyond.  We fix our financial focus on the future while we live in the now.  After all, the now is all there is.