A Correction is Coming, a Correction is Coming!

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“The right time to buy equities for the long term is whenever you have the money.”
– Nick Murray

The Dow hit 22,000, it’s too high! The Shiller CAPE ratio recently hit 29! Trump can stop Tweeting! A correction is coming…a correction is coming!

I’m no Paul Revere and we aren’t at war with the British but I do know a correction is coming. Maybe not today, maybe not tomorrow but someday. You know what we say…so what.

As we have written many times before, corrections come and corrections go but the long term average annual return of the US stock market is better than 10% (with full dividend reinvestment, the S&P’s annual return compounded at about 10.7% over the 70+ years—seven percentage points above the CPI inflation rate).

If you are waiting for a correction, let me remind you of a great quote from famed investor Peter Lynch:

“Far more money has been lost by investors preparing for corrections, or trying to anticipate corrections,
than has been lost in corrections themselves.”

What I am confident in is that years from now, the market will be higher than it is today. You can write that down in ink and feel from to call me in 20 years. If I am wrong, I’ll come to your house, personally apologize and wash your car (if we are still driving cars).

And finally, if you are worried about the market being too high or the state of the world in general, please find some time to go back through our blog and read almost any of our posts. I think you’ll feel better if you do. Here are just a few posts that I thought would make for good summer reading:

Too High?

Turn off the financial news spigot

Trading vs Investing

Great Investors have Faith in the Future

C.A.P.E Fear?

And lastly, please…don’t mix Investing with Politics. Read our Erik’s post: Permanent Crisis or Not Perfect, but Better!

As always, our advice is to relax and enjoy these dog days of summer. Spend time with your family and friends. Maybe enjoy a cold beverage or go to a ballgame (both sounds even better) but please don’t waste your energy worrying about the stock market…life’s too short.

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About the Author:

Paul is the co-founder of Concentus Wealth Advisors and currently serves as the Chief Operating officer of the firm. After graduating with his Finance degree from Georgetown in 1997, Paul spent three years working for Credit Suisse First Boston in New York on their institutional sales desk and then as Director of Global Equities Information Technology. Paul continues to use his technology expertise to bring cutting edge resources to the Firm and their clients. He currently resides in Berwyn, PA with his wife and four children.

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