Big, scary stock market sell-offs happen all the time in bull markets
From: businessinsider.com
The markets have been getting rocked.
Stocks in the US were lower for a fourth straight day on Friday with all 30 Dow stocks lower.
Friday’s intra-day low of 1,970 on the S&P represents a 7.6% drop from its intra-year high of 2,134.
So, is it time to panic?
It’s important to note that big sell-offs occur all the time, even during years when the markets are surging. For what it’s worth, even the Black Monday crash of 1987 was part of a bull market.
“Despite average intra-year drops of 14.2%, annual returns [have been] positive in 27 of 35 years,” JP Morgan Funds’ David Kelly recently noted.
Kelly offers this chart of intra-year declines that we think every investor should take a good look at.
The bottom line is: Sell-offs happen. Sometimes they’re big. But they’re normal, so there’s no reason to panic.
Yet.
