At Generations Wealth Planning, we use diversified holdings of quality stocks in order to generate longterm growth in your portfolios. These investments have had great longterm results, and we try not to focus too much on the short term prospects for the stock market.
Having said that, we've received questions from many of you asking, has the stock market risen too much, too quickly? I thought the following two charts would help give some perspective on those questions.
As you will see from this chart, we have gone 578 calendar days without a 10% correction, which has been a good run. But there have actually been 10 lengthier periods since 1928 when the S&P 500 gained at least 10% without pulling back 10%. In fact, the longest streak was from 1990 to 1997, when the index went almost a full seven years without a 10% correction. So, don't think the market has to go down just because it's been a while.
Here, we look at the length of time since a relatively minor three percent correction. We are currently in what is now the second longest rally without a three percent correction on a closing basis since 1928. Another two months of this streak, and it will pass the 370 day period in 1994-95 that currently holds the record.
So what's the big picture? The longterm strong uptrend that we've seen for US stocks appears to be in place and could continue for quite a while longer, but it would be normal and even healthy for the S&P 500 to experience a three to five percent correction in the short term.
As usual, we want to emphasize that short term stock market moves are unpredictable. Our goal is to own stocks for you when they're reasonably priced for the longterm growth. Thank you for your confidence in us. And please let us know if you have any comments or questions.
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