Originally Posted by CBreezy

Yawn. More Yawns.

“For anxious investors who want a quick answer to the question, the simple answer is, “No.” Now we’ll explain why. First, corrections are natural, normal, and we’d even say, necessary. I’ve gone through many of them, having started my career in investment management just two months before the 1987 crash.

While different circumstances led to each one, the fundamental aspect of a correction (or even a bear market) is that the market simply reprices securities to better match the underpinnings of an investment as they currently are.

Sometimes, this may happen because of a recession, which we do not think is the most likely scenario, but in many other cases, it’s simply because stocks got a little ahead of themselves. Right now, stocks in the S&P 500 are more expensive relative to their earnings than they historically have tended to be, according to Ned Davis Research. That means that investors bid up share prices more than (or perhaps one might even venture to say “earlier than”) they should have.

In that sense, a correction is just that: “correcting” a stock’s value to what the earnings and net worth of the company in question should dictate.”

“We don’t really manage your money. What we do is encourage you to buy some stuff and then sit on it so we can charge you a fee.

When prices decline, because we don’t really pay attention to the markets, we have to send out an excuse letter to keep you from transferring your money to another advisor who actually pays attention to what is going on.

Even though we knew stocks were overvalued, and such overvaluation leads to corrective cycles in the market, we really didn’t think about selling stocks to reduce the risk of loss. We are too busy trying to get other people to invest money with us. The more the better.

We hope you understand, but our revenue line is more important than yours. Oh, and please deposit more money in your account because dollar cost averaging works better for us than it ever will for you.”