Skip to content

Market Corrections: a time to buy

As we write this letter, equity markets are down some 26% on a year-to-date basis, as measured by the S&P500. This is the worst performing first half of a year over the last 50 years.

In this situation it is natural to be concerned. But it is even better to be informed.

Please note that regular corrections in the stock markets are just about guaranteed. Almost every year at some point in time, markets correct some 7 to 10%. Every two to three years, even 20 to 30%. Every ten to fifteen years, they even correct 50%.

It is very important to expect these corrections as normal market behavior, and to use these weaknesses to add to your holdings.

The current correction of about 26% is no exception. We would strongly urge you to consider adding to your holdings given that global economies are strong, and valuations are very reasonable.

We point you to our writing on the pain and joy in the stock market. It narrates what we have just stated. We request you to read and reread the piece.

In the end, it is the informed investors that win out.

Leave a Comment