During a recent interview on CNBC, Leuthold Group’s chief investment strategist said, “I think a good gut check to sentiment, like a 15 percent correction, might be just the ticket to extend this bull market.” Jim Paulsen said a correction is necessary to reflect rising interest rates, peaking earnings, and slower economic growth, adding, “What we need is a lower valuation, I think, to sustain a different environment if this recovery is going to continue.”… Read More
Just because market corrections are normal, that doesn’t mean they’re painless. This according to a recent article in Bloomberg. The article points out that the present bull market has seen five corrections before the most recent one, and “it’s taken around seven months on average for equities to climb out of their hole. Based on that path, the current jitters won’t be fully eradicated until August.” Since 2009, the article reports, the average correction in… Read More
Mark Hulbert writes in MarketWatch that “the U.S. stock market over the next six months is more likely to be notably higher than it is to drop further.” He bases this prediction on a review of historical data since the Dow Jones Industrial Average was created in the 19th century: “a likely rally is what emerged when I studied all occasions over the last 120 years in which the stock market tumbled as precipitously as… Read More
Brett Arends over at MarketWatch gives equity investors’ fretting over the latest market volatility some timeless advice in his latest ROI column — “Buy early. Buy often. And buy cheap.” Arends outlines three principles investors can follow in times like these. Buy Early: Over most long term periods of time (5-10 years), stocks have a high probability of increasing in value, which is why Arends says investors should have a bias toward being invested and… Read More
Trying to predict the next market correction? Barry Ritholtz has some advice for you: Don’t.
There’s been a lot of concern about the market’s valuation after last year’s runup and this year’s volatility, but top fund manager Bill Nygren isn’t buying it.