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Putting a Lid On October's Market

The market wrapping up October with its worst weekly and monthly performance since March.

The S&P 500 falling 6% on the week and a little more than 3% for the month of October.  The Dow off nearly 7% this week and nearly 5% for the month.  While the Nasdaq drops about 5.5% this week, almost 2.5% for the month.

On the year, or year to date, or so far this year as normal people say it, the 500 is up 2%.  The Dow is off 5.5%.  And the Nasdaq is leading the race with a 22.5% gain.

Fear is another factor impacting Wall Street.  Increasing Covid cases here and abroad with more lockdowns restarting in Europe spooking markets.  Mixed feelings about corporate profit reports despite most companies reporting better than expected earnings doesn’t help.

And then there’s the stimulus, or lack thereof.  If a second stimulus deal ever happens, it won’t be until after the election.

Here’s a treat.  We’ve seen a faster than expected economic recovery with third quarter GDP coming in at a record 33.1%, gaining about two-thirds of lost Corona ground.  Sure, it was knocked out cold, so it had to recover.  But not even economists were expecting anything this big.  And to be fair, nobody expects this quarterly rate of recovery to continue for a full year.

While it feels like we’re living through the longest and craziest crisis one could imagine, this too shall pass.  Beyond the case-demic and the election, there will arise another crisis du jour.  And mainstream media will try to scare us with that one.  At least for 24-hours.  Until they decide there’s another, scarier, more fear inducing crisis they can generate ratings with.

We just need to let our common sense and critical thinking kick in.  We’re long-term investors.  Not traders or speculators.  We invest in the great companies of the United States and the rest of the world.  And I think those companies can figure out how to serve their customers and make money in any environment. 

Isn’t it great to be an owner of some of the most technologically advanced, best managed, most profitable companies that ever existed?  I certainly think so.