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November 06, 2018 | Vito Finucci


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The markets are down 10-12% from recent highs. A recent study done by Ben Carlson (Ritholtz Wealth Management) shows what happens when markets fall 10%... what's next?

Financial Planner London Ontario

Today’s “snippet”…

 

Yes, there has been more volatility lately. There are many reasons for this that I have already covered, but the main question we are getting today is: “Is this the end of the bull market?”

 

My answer is “No, I don’t think so!”

 

The markets are down 10-12% from recent highs. A recent study done by Ben Carlson (Ritholtz Wealth Management) shows what happens when markets fall 10%:

  • 45% of the time, they did not fall any further than 15%
  • 13% of the time, they did not fall any further than 20%
  • 17% of the time, they fell between 20-30%
  • 11% of the time, they fell between 30-40%
  • 9% of the time, they fell between 40-50%
  • 6% of the time, they fell more than 50%

So about 60% of the times when markets fall 10%, we did NOT enter a bear market (defined as 20% down).

 

One more thing, and this is the important part of this piece:

 

Since World War II, the S&P 500 Index has NEVER. I repeat NEVER been lower off the October lows by year end during a US midterm election year. NEVER. Here is the chart (and evidence).


Stay tuned,

Vito Finucci, B.COMM, CIM, FCSI

Vice President and Director, Portfolio Manager
 

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