The S&P 500 Index just fell 4.1%

From Justin Brill, Editor, Stansberry Digest:

Yesterday, the benchmark S&P 500 Index fell 4.1%

That’s its biggest one-day decline in six years, since August 2011. The blue-chip Dow Jones Industrial Average fell as much as 1,500 points before closing down 1,175.

This follows a similar decline last week that saw the three major market indexes shed as much as 4% through Friday. All told, U.S. markets have lost nearly 8% of their value over the past six trading sessions.

Remember, we’re long overdue for a correction…

The stock market has experienced a correction of 15% or more every 727 days – or about every other year – on average since 1950.

We’ve now gone more than 2,350 calendar days and counting… or more than three times longer than “normal.”

But let’s take a step back and put these moves in perspective…

An 8% decline in six days is relatively rare. But it’s still only about half as much as we’d expect to see in a normal, healthy correction. In fact, what we’ve seen so far doesn’t even qualify as a “correction.” We’re still only in “pullback” territory – defined as a decline of at least 5% from a high.

More important, this decline is just a small fraction of the huge 50% to 75% gains we’ve seen in these major indexes since the market bottomed in February 2016. Given the huge run up in stocks over the past two years, it’s possible we could see an even-larger-than-normal decline when it finally arrives.

Is this the start of that long-awaited correction?

We suspect it is… But there’s simply no reliable way to know in advance. But we can be reasonably sure of one thing…

If you’re among those losing sleep over the market, your portfolio is likely NOT prepared to weather a real correction.

You might be overcommitted to stocks in general… you might have too much exposure to certain sectors of the market… or you might have too much of your money in several individual stocks. If you’re like many novice investors, it’s probably all three.

If that’s the case, we urge you to take some time tonight to re-evaluate your asset allocation and position-sizing strategies. And be sure to have a trailing stop loss – or another well-defined exit strategy – in place for every position you own.

And again, if you need more help building a well-balanced and diversified portfolio, we encourage you to learn more about our Stansberry Portfolio Solutions product. Click here for all the details.


Justin Brill

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