๐Ÿ“ˆ TKer by Sam Ro

๐Ÿ“ˆ TKer by Sam Ro

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๐Ÿ“ˆ TKer by Sam Ro
๐Ÿ“ˆ TKer by Sam Ro
The summer stock market slump and what Wall Street pros are saying about it ๐Ÿ“‰

The summer stock market slump and what Wall Street pros are saying about it ๐Ÿ“‰

Remember TKer Stock Market Truth No. 2 ๐Ÿ“‰

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Sam Ro, CFA
Aug 21, 2023
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๐Ÿ“ˆ TKer by Sam Ro
๐Ÿ“ˆ TKer by Sam Ro
The summer stock market slump and what Wall Street pros are saying about it ๐Ÿ“‰
2
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The stock market has had a rocky couple of weeks. The S&P 500 is down almost 5% in August.

As I noted in the August 7 TKer, itโ€™s not unusual to see some volatility this time of year.

More generally, sell-offs are normal in any given year.

As Carson Groupโ€™s Ryan Detrick observed, the average year sees at least three separate corrections of at least 5%.

Sell-offs are normal. (Source: @RyanDetrick)

โ€œVolatility is the toll we pay to invest,โ€ Detrick said. Indeed.

Itโ€™s not hard to back into reasons traders and investors might be selling: Interest rates have been rising; economic growth has been strong, raising the risk of more hawkish monetary policy; valuations have been above average; the worldโ€™s second-largest economy is stumbling; and the Russia-Ukraine war continues.

Iโ€™m reminded of the last piece I wrote as Business Insiderโ€™s markets editor back in February 2016, during a pretty messy market correction. Hereโ€™s an excerpt:

Every major sell-off in history has been accompanied by a mix of economic concerns, monetary policy shifts, geopolitical tensions, or some other source of consternation that might make a rational person demand a higher premium for putting their capital at risk. The details are different each time. But structurally, it's generally the same story: it's risky out there.

This is not to downplay any current concerns. Rather, itโ€™s a reminder that there are always things to be concerned about. In fact, itโ€™s these ever-present uncertainties that hold back stock prices and explain why long-term returns in the stock market can be relatively high.

Occasionally, a major risk will emerge that threatens the short-term outlook for earnings and warrants a major adjustment in the stock market. But Iโ€™m not so sure thatโ€™s what weโ€™re experiencing right now. Unfortunately, weโ€™ll only know in hindsight.

With that in mind, hereโ€™s a roundup of what some of Wall Streetโ€™s top stock market experts are saying right now:

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