There are times of fear and others of greed. The market is collapsing according to many. There is a lot of blood in the street and this might continue.
The fear mongers on CNBC were espousing the usual noise how the world is coming to an end. I even saw they were putting on special coverage in addition to their regularly scheduled programming. Anything to stir up more fear I guess.
So where does the situation actually stand?
The key to the markets is to keep your head when others are losing it. We are witnessing a lot of FUD expecting things to collapse. Many of the many doomsday people are beating the drum in glee.
What is truly taking place is that the markets are only a bit more than 5% from their all time highs.
It is always scary when things happen so quickly. Times like these also are when the media piles on. There is always a black swan out there that is going to take the market out.
Unfortunately for the end of the world scenarios, this is something we heard for the past decade. Each time there is a market pullback, people think the end is near. The last decade has repeatedly proven what normal pullback look like.
The draw down might not be done. Do not be surprised if we see somewhere around 10%-15% before it is all done. This is would still be in line with historic pullbacks.
For the past 10 years, the buy the dip has been the ideal strategy. Of course, this is all good until the market does get hit by the "big collapse". Nevertheless, it is not safe to presume each pullback is the big one.
Overall, the market is overdue for a significant correction. Many stocks have progressed too far, too fast. This has provided a situation where valuations are being seen by many as insane.
Caution is always a good thing but it is vital to keep things in perspective. Pullbacks tend to be faster than bullish reversals Fear is a greater motivator for many.
When panic is strong, is can often be a great buying opportunity. Is that what this market is presenting? Only time will tell but it is good to keep our eyes open.
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Posted via Steemleo