While there are always bumps in the road, it is my belief that the current investment headlines do not pose a significant risk to the longer-term uptrend in stock market valuations.

In 2020, after the COVID-19 market related pullback, we started the most recent bull market. Since then, we experienced 3 market dips (more than 5%) and 1 moderate correction (more than 10%). What is interesting about the first year of this new bull market is that the market corrections have occurred at a pace that is exactly in line with long-term averages while delivering an above average return for equity investors.

For the remainder of 2021, I am certainly expecting market volatility… there will be market corrections. Market drawdowns are inevitable, but also a normal stock market occurrence. Some factors that may contribute to these corrections in 2021 include:

It is near impossible to time the market for corrections (beyond luck). If any number of the above risks are realized, I would recommend that 2021 corrections be used as buying opportunities to take advantage of discounted prices in an uptrending equity market.

Typically, way more money is lost as investors sell out and try to guess the next correction… than what is lost in corrections themselves.

Brad