Markets “In a Nutshell” for October 30, 2023
Investment Week at a Glance
Stocks finished lower for the week. The Dow Jones Industrial Average fell 2.14%, the S&P 500 was down 2.52%, and the NASDAQ fell 2.62%. Foreign stocks (MSCI EAFE) were also down, falling 0.77%. Bond prices were down for the week, with the 10-year U.S. Treasury ending the week at 4.85%. (Data source: Morningstar)
After a strong late spring/early summer rally, U.S. stocks have been on a downtrend since August with broad stock market indexes dropping 10.7% since August 1st. Bonds have been hit also (as interest rates have spiked up) with the broad bond indexes down 5.2%. While these downtrends most certainly are not enjoyable, stock and bond market corrections are part of market cycles and have the function of bringing frothy markets down to more reasonable valuation levels. They also serve to provide opportunities for investors to buy quality investments at lower prices. Let’s take a look:
Investment market downturns, while not enjoyable, are part of normal market cycles. Patience has historically been the course of action for investors as downturns have always turned into the next leg up in stock and bond markets. Downturns also offer investors opportunities to buy at lower prices. As always, market cycles need be put in context of individual goals and objectives.