As we watch and comment, the psychology is evident among the masses and all predictable. We had portended in a recent Ranting (and I quote)…“one of these times, the market will bounce and it won’t be another head fake”…Well golly…. Looks like we are in the midst of “A” bounce. Not nearly enough to repair all the damage but enough to mess with the masses. The “wait for a deeper bottom crowd” are noticeably pissed (and rationalizing why this isn’t “real”). The professional talking heads who advised that the “market won’t’ bottom until xxxxxx” crowd are silent. Most are dazed and reasonably confused (as they should be). As I wrote in 2022, same as I wrote in 2009, when markets have deep, hard, and violent, declines…. the ensuing recovery in the equity markets tend to be sharp and fast. Normally recovering 40 percent of the losses in rapid fashion and long before the masses catch on. IF the market bottomed on June 17th (big if but go with me), then on August 9th we passed the 40 percent recovery threshold.
Not enough for people to feel euphoric again, not to declare the Bear dead (which is the good thing) but enough to elicit some stirring in the weeds. As emotional creatures we aren’t secure enough to feel good but enough to stop feeling awful. Personally, I like how it sets up but that’s a whole different talk for another time.
Looking ahead (because that’s what we do), a lot of the universe has been set right. At least from the financial and investment perspective. Interest rates have risen back to reasonable levels and the free money era is pretty well done. That alone has consequences in the real world that were long overdue. Most of the speculative crap has been erased (or at least reset many years). Housing and real estate have cooled significantly and hopefully don’t decline too much in their ongoing correction. Last and most important, expectations have been reset to a level of normality that is healthy. Regardless of the bottom we hit in June (THE bottom or A bottom), the bulk of the carnage has been done. Looking forward (which is what markets do), they will continue to readjust to the “tomorrow” and predict its inevitability long before the facts are known.
As always, don’t hesitate to reach out with anything you need or wish to discuss. Thanks again for listening.
Ed, Frank, Tammy
Edward Stiles
200 N Union St.
Kennett Square, PA 19348
cell 610-745-1931
Securities and Advisory Services offered through Commonwealth Financial Network®, member FINRA/ SIPC, a Registered Investment Adviser. Fixed insurance products and services are separate from and not offered through Commonwealth Financial Network.
All indices are unmanaged, and investors cannot actually invest directly into an index. Unlike investments, indices do not incur management fees, charges, or expenses. Past performance does not guarantee future results.
This material is intended for informational/educational purposes only and should not be construed as investment advice, a solicitation, or a recommendation to buy or sell any security or investment product. Please contact your financial professional for more information specific to your situation.