Raymond James Senior Research Associate, Andrew Adams, published the following statistics from InvesTech Research this week in relation to the S&P 500. "Since 1932, the S&P 500 has corrected 5% on average every 7.1 months and corrected 10% on average every 25.9 months."
Full report can be found by following this link: https://onedrive.live.com/?cid=B747BC0C87824AA7&id=B747BC0C87824AA7%215717&parId=B747BC0C87824AA7%21117&o=OneUp
The first full week of February has given us both a 5% and a 10% correction from recent highs in the index. Do you remember the most recent 5% pullback in the S&P 500? By my records it occurred in June 2016, 19 months ago well above average from a typical 5% downside event. How about the last 10% correction? That was in February 2016; 24 months ago, so just about the average time frame.
I don't know if you find those statistics comforting or irrelevant but the market has always had periods of pullbacks and corrections even during long-term bull markets like we are in now. I can't predict whether or not this is it for the downside for now or whether we will see lower lows in the coming days. For that type of analysis, I prefer to read what other industry experts have to say that are able to get beyond the day-to-day market movements and look at the overall picture. Therefore, I have included a link to a recent report published by First Trust Portfolios that digs deeper into the markets and the US economy.
https://www.ftportfolios.com/Commentary/EconomicResearch/2018/2/9/this-is-just-a-correction
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The S&P 500 is an unmanaged index of 500 widely held stocks that is generally considered representative of the U.S. stock market. Investors may not make direct investments into any index. Past performance may not be indicative of future results. Individual investor's results will vary.
