October 27,特快资讯 2023-02:56 pm EST
At present, the world and the stock market are in one of the most unstable situations in recent years. The ongoing war between Russia and Ukraine is still going on, with no end in sight. At the same time, Israel and Hamas fought in the Gaza Strip, and war broke out in the Middle East. In addition to real geopolitical concerns, economic and wall street concerns have also reached a white-hot level. Stubborn inflation led the Federal Reserve to keep interest rates at a high level for a longer period of time. Although GDP growth is healthy, the sharp increase in government expenditure casts a shadow over this figure. From the outside, it looks like a return to the "stagflation" period in the 1970s, when inflation rose, growth slowed down and gas pipelines became commonplace. To make matters worse, the Standard & Poor's 500 Index ETF (SPY) and Nasdaq 100 Index ETF (QQQ) entered the correction range this week (down 10% from the high point). At the same time, the weakest index Russell 2000 small-cap ETF (IWM) fell to its lowest level since 2020.
No matter what investors think on the surface, it is important to keep a long-term view, because:
The US stock market rose over time.
Since the establishment of the Standard & Poor's 500 Index in 1950, the average annualized rate of return is about 10%. In other words, adjustment is part of the normal cycle. The bulls may lose some battles, but in the end they will win the war.
Market adjustment is normal, but Volkswagen is rarely correct.
Since 1980, the average annual adjustment of the S&P 500 index has been about 14%. Although the stock will go up in the long run, it is never a straight line, but it goes up all the way. Legendary value investor Warren Buffett has a famous saying: "I will tell you how to become rich." Close the door. Be afraid when others are greedy. When others are afraid, you should be greedy. Although the current adjustment is normal in depth, investors are extremely scared.
CNN's fear and greed index is at an extreme level. Another confidence survey, the pessimism index of the American Association of Individual Investors, reached the highest level in nearly six months.
October is a bear market killer.
Seasonal trends played an almost perfect role in 2023. Today, October 27th, happens to be the average date when the Standard & Poor's 500 Index bottomed out (data can be traced back to 1950). Although history does not repeat itself, it often rhymes.
Small-cap stocks fell to the "bottom"
Even after the recent correction, the Nasdaq index has risen by about 30% so far this year.However, for most of this year, small-cap stocks dragged down the market. The Russell 2000 index has not reached a 52-week high for nearly 500 days.This means that it is approaching the worst drought in history. Will things get worse? Sure, but the data tells us that we should hit bottom soon.
History tells us that market correction is an inevitable part of investment. In the short term, the market fluctuates greatly and it is difficult to trade. However, the market may suddenly change when people least expect it, so investors should keep a long-term view.
Zacks selected "single best choice"
From thousands of stocks, five Zacks experts chose their favorite stocks, which will soar by 100% or more in the next few months. From these five projects, Sheraz Mian, the research director, selected the most explosive project.
This is a little-known chemical company. Its share price rose by 65% last year, but it is still very cheap. With the continuous growth of demand, the soaring profit forecast in 2022, and the stock repurchase of $1.5 billion, retail investors may flood in at any time.
This company may catch up with or surpass other stocks that are expected to double in the near future. For example, Boston Beer company soared by 143.0% in more than nine months, while NVIDIA soared by 175.9% in one year.
Is the market adjustment over?