Sure, the stock market is down nearly 5 percent since May 21, the day before the Federal Reserve first said it could begin pulling back its economic stimulus.
Yet taking a step back, the selloff could ultimately represent nothing more than a hiccup. The market is in the midst of a bull run that began in March 2009, and it has endured sharper declines several times since the rally began. Every time, stocks have recovered.
Investors have reason to feel confident stocks can bounce back yet again. The economy is gradually improving and corporate earnings are setting records. Those factors drive stocks higher.
"It's just a bump along the road and these levels represent a buying opportunity," said Peter Cardillo, Chief Market Economist at Rockwell Global Capital. "By the end of the year we will be much higher."
The 4.6 percent selloff from the S&P 500's May 21 record close of 1,669.16 doesn't even qualify as a pullback - defined as a slump from peak to trough of 5 percent to 9 percent.
Since bottoming out at a low of 676.53 after the financial crisis, the S&P 500 index has climbed 135 percent. During that stretch it had six pullbacks and two corrections - losses of 10 percent or greater. The index has yet to slip into a bear market, a drop of 20 percent or more.
Yet taking a step back, the selloff could ultimately represent nothing more than a hiccup. The market is in the midst of a bull run that began in March 2009, and it has endured sharper declines several times since the rally began. Every time, stocks have recovered.
Investors have reason to feel confident stocks can bounce back yet again. The economy is gradually improving and corporate earnings are setting records. Those factors drive stocks higher.
"It's just a bump along the road and these levels represent a buying opportunity," said Peter Cardillo, Chief Market Economist at Rockwell Global Capital. "By the end of the year we will be much higher."
The 4.6 percent selloff from the S&P 500's May 21 record close of 1,669.16 doesn't even qualify as a pullback - defined as a slump from peak to trough of 5 percent to 9 percent.
Since bottoming out at a low of 676.53 after the financial crisis, the S&P 500 index has climbed 135 percent. During that stretch it had six pullbacks and two corrections - losses of 10 percent or greater. The index has yet to slip into a bear market, a drop of 20 percent or more.
Read more here: http://www.miamiherald.com/2013/06/21/3464205/bumps-in-the-stock-markets-bull.html#storylink=cpy
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