"Finally the long-awaited correction has arrived" by: John Sample

   Well does the market have your attention now? 
   I have been trading the market for most of my life thanks to my Dad. I have seen bull and bear markets, crashes, recessions and bubbles in valuation. 
   We were able in two days to wipe all the gains for 2018. 
   The early-morning trading Tuesday before the stock exchanges in the U.S. opened were down 10 percent from the record high levels. 
   That my friends is what you call a correction not a crash. 
   By the time the markets opened, that 500-point loss in the Dow was completely eliminated and was in positive territory. 
   Do I think the worst is behind us? I don’t know, but at least the absurdly high values were trimmed and I am at least interested.
   Stocks climb like going up stairs. The further you get up, the thinner the air and the going gets harder and harder. Stocks drop like stepping into an elevator shaft. 
   Going down is much faster and hopefully you actually are in the elevator that will stop a few floors down. That is what happened in two days. We dropped quickly, but we all survived. There are lessons to be learned though.
   For all those who jumped into the market in January, it is no fun. Late money almost always loses. 
   Speaking of losing, how is that Bitcoin investment going now that the value has dropped below $7,000? Not a catastrophe if you got in at $250, but a train wreck if you jumped the train at $15,000. 
   It’s noteworthy the equities indexes climbed over 20 percent last year and that is not the norm. Realistic investors gladly accept a 7 to 9 percent average return on their investment. 
   That is why get-rich quick schemes are so easily sold to the public, promising no risk and doubling of one’s money. 
   Patience is one of many lost virtues. Corrections happen just like the sun and moon rising. They actually are constructive to the process. We don’t like them much more than we like the cold of the winter but each is essential to long-term growth.
   I am always amazed at what analysts will point at as a correlation in the markets’ action. 
   Last Friday, Janet Yellen stepped down as the Federal Chairman and was replaced by Jerome Powell. 
   Guess what? When Greenspan, Bernancke and Yellen each moved into the Fed chair, the markets dropped. 
   At least this position only comes open every four years, but in truth has nothing to do with anything. 
   Of more importance is that the last correction came in August 2015. 
   In case you forgot, we had a banking crisis in China and Greece was teetering on the brink of financial collapse that could have impacted all of the European Union. The indexes dropped 10 percent. 
   There was tremendous concern that was justified. 
   Look where we are today. Sure, interest rates will rise but they still are historically low. Inflation is coming but that has been postulated for the last five years. 
   Gross Domestic Product is higher than projected, unemployment is low. 
   What we have here people is the market rolling over while some take profits and the margin people get taken to the cleaners. 
   This market is far from a value but it is at least worth considering. 
   Never forget we are just back to where we ended 2017 and many considered those values overpriced and I cannot argue with that.
   The lesson to be learned is to ignore markets when everyone is jumping in and find courage when the going gets rough.

 

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