It’s Normal For the Stock Market to go Down

by | Jan 21, 2022 | Blog, Videos

The stock market has gotten off to a bumpy start in 2022. In this week’s video, Casey shares some statistics about what’s been happening underneath the hood of the stock market. As well as providing some historical context about market drops.

We understand if you are worried, but we’re here to tell you that these types of market moves are normal and to be expected. Stock market volatility is the cost of doing business.

Show Notes

NASDAQ & S&P 500 stats – Liz Ann Sonders

S&P 500 average intra-year drawdown since 1980 – Nate Geraci

This Stock Market Index Has Doubled Off the Pandemic Lows- Mullooly Asset Podcast

https://tpmullooly.wistia.com/medias/n1x6y7ujvv?embedType=async&videoFoam=true&videoWidth=640

It’s Normal for the Stock Market to Go Down – Full Transcript

Casey Mullooly: In episode 277, we do the worrying for you.

Welcome back to the Mullooly Asset Show. I’m your host, Casey Mullooly. And you know it’s serious because I’ve got the tie on. We’re recording this in the middle of January. And boy market has gotten off to a bumpy start this year.

If you’re just looking at the broad indices, the market really hasn’t gone anywhere in the last couple of months, but if you look under the hood at some individual names, lot of stocks have been taken it on the chin.

According to Liz Ann Sonders, who is the Chief Investment Strategist for Charles Schwab, about 75% of the stocks in the NASDAQ have had a drawdown of 20% from their 52 week high. And that number is 40% for S&P 500 stocks. So there’s been a lot happening, especially we’ve seen these growthy type names that have been really taken it on the chin of late.

But I also know that we recorded a podcast just about three months ago, about how the S&P 500 had officially doubled off the pandemic lows of March 2020. Yeah. A double is a 100% gain. So look, I’m not sharing these statistics to say that we need to panic or to rip up the script. That’s not why I bring these numbers to your attention.

I’ll give you one more number for you. The average intra-year drawdown for the S&P 500 since 1980. Guess what it is. 14%. So some will say we’re on our way. Some will say the next crash is coming. Don’t listen to them. We met with someone recently and on his way out, he was joking with us about how he doesn’t really pay attention to his account. And that’s why he works with us so we can pay attention to it.

And so we can worry for it. When you Google investment advisors, it’s funny, but the first things that pop up are why not to work with an investment advisor and why you can’t trust an investment advisor.

Hmm. Well, when you work with a fiduciary investment advisor, like we are here at Mullooly Asset Management, you know that we always act in your best interest and our investment decisions are with your best interest at heart. So whenever I try and steal my dad’s thunder, he goes,

“Would you leave the jokes to me? All right?” So I’m going to take another one from him here and say, “Would you leave the worrying to us? All right?” That’s the message for episode 277. We’ll be back with you for 278 next week. We’ll see you then. And thanks for listening.