We have moved into the last quarter of this year and it couldn’t come soon enough.
The Standard & Poor’s 500 stock-index posted its largest monthly loss since March 2020, dropping over 9%.
For the quarter, the S&P 500 dropped over 5%, finishing with the third consecutive down month for the first time since 2009.
September lived up to its reputation as one of the worst trading months.
That is old news and now we are headed into the last quarter and I’m certainly concerned about what is coming next.
The problem is that there is little good news.
Amazon is cutting costs by closing call centers.
Nike projected lower sales and Tesla reported lower than expected sales in the last quarter.
Apple is concerned about demand for its new series of phones.
And just when you needed it the least, OPEC may cut production, pushing crude prices back up after they had dropped providing much needed relief.
In case you missed last week, the S&P 500 dropped below the June lows for the year.
The index made it down to 3585. Some analysts have dropped year-end projections down to the 400 level.
By now you must be getting the point there is nothing but bad news when it comes to financial markets.
I get calls from friends asking where the bottom is.
I thought that we would at least test 3400, while I have heard others speak of 3200.
I am a value investor and my one main rule is that when it gets the worst you have a chance for real gains.
What I do not do, however, is to try to trade at the bottom.
I don’t think anyone truly knows when and where that will happen.
I try to start picking up quality stocks in small lots to make sure I am on the train should it suddenly leave the station heading north.
I then wait for the S&P 500 to establish a real bottom.
I am trying to assure myself of value - not to brag to my friends about trading at the lowest point.
As bad as the news is of late, it does not seem that traders have capitulated.
We also know the Federal Reserve has more rate hikes coming.
I would certainly expect this market to bounce back up, but I don’t see the trend down ending here.
I hope I am wrong and, as such, I am picking up quality stocks at much better levels.
It is not an exciting trading practice, but it pays the bills around here.
