In doing some research, I noticed that the S&P (the general market index), has been down over 14+% 22 times over history, 6 months following these losses the market has been up over 10.2% (on average) and it has been up over 22+% 1 year later...if you take out the Great Depression losses, the average 6 month and 1 year returns are much higher.
Even despite the sharp selloff in the markets this morning (due in part to profit taking from yesterday's big advance, and continued financial woes in Europe - specifically French and Italian bank stocks sold off in overnight trading), I continue to view the backdrop of the markets as more positive than negative. Another day, more volatility, but as I've said, I expect just as much. Due in large part to the financial stability in the U.S. markets, the Federal Reserve comments yesterday where they said they would maintain extremely low interest rates through 2013, and adding to that the extreme decline in oil prices (this acts as a tax cut to consumers), I am still looking to strategically buy stocks as they go on sale.
As we continue to slosh back and forth, I am also looking at high yielding dividend stocks which have sold off recently (such as Verizon), and also high yielding corporate bonds (such as Rite Aid bonds which yield 8.6%).
Buy low sell high - be opportunistic when others are fearful...
