Instead of getting caught up in the\nheadlines that tell you to be fearful about the fate of the market, I suggest\nsticking to hard data and key economic indicators. To\nhelp you do this, I am offering all readers a look into our just-released October 2019 Stock Market Outlook report.<\/strong>\n<\/strong><\/p>\n\n\n\n This\n22-page report contains some of our key forecasts to consider such as:<\/p>\n\n\n\n If you\nhave $500,000 or more to invest and want to learn more about these forecasts,\nclick on the link below to get your free report today!<\/p>\n\n\n\n IT’S FREE. Download the Just-Released October 2019 Stock Market Outlook<\/a>1<\/a><\/sup><\/strong><\/p>\n\n\n\n _________________________________________________________________________<\/p>\n\n\n\n I\u2019ll pull an example from earlier this year to help\ndemonstrate the point. Back in early August, many readers will remember the sudden\nand dramatic August 5th decline when the S&P shed 3.3% and the tech-heavy\nNasdaq fell -3.8% in a single trading session.2<\/sup> In a \u201cMitch on the\nMarkets\u201d column just a few days after the decline, I asserted my belief that\nthe downside volatility was a correction\n(and not a bear market), and reminded readers that \u201cequity market recoveries often happen in \u2018v-shaped\u2019 patterns, which\nmeans in many cases, the recovery can happen just as quickly as the decline.<\/em>\u201d I urged patience in the face of fear. <\/p>\n\n\n\n As you can\nsee in the chart below, concern about the U.S. economy bubbled up as a result\nof the selling pressure. Data from Google Trends shows that searches for\nrecession in the U.S. spiked at precisely the time the S&P 500 entered a\nvolatile patch:<\/p>\n\n\n\n Source: Google\nTrends3<\/sup><\/em><\/strong><\/p>\n\n\n\n In my\nexperience, it is during these times \u2013 when the market goes haywire and\ninvestor sentiment shifts decisively to the negative \u2013 that bottoming patterns\ntend to form. <\/p>\n\n\n\n The S&P 500 Over the Last Year (red\nline indicates \u2018bottoming\u2019 following August 5)<\/strong><\/p>\n\n\n\n Source: Federal Reserve\nBank of St. Louis4<\/sup><\/em><\/strong><\/p>\n\n\n\n For long-term\ninvestors who ignore the noise and focus on where the markets will likely be in\n10, 20, even 30 years, these events often end up being attractive entry points,\nin my view. In the example above, the proof is in the pudding: it\u2019s only\nbeen a little over a month since the big August 5th decline, but the equity\nmarkets as measured by the S&P 500 appear to remain in recovery mode. The\nS&P 500 ended August 5th at 2,844 and as of Thursday was trading close to\n3,015.5<\/sup> <\/p>\n\n\n\n Bottom Line for\nInvestors <\/strong><\/p>\n\n\n\n To be 100% clear, I do not advocate for investors to seek\nout volatility and negative sentiment as a signal to trade in-and-out of the\nmarkets. At Zacks Investment Management, we do not believe in short-term market\ntiming, and as I\u2019ve written many times before, we think investors give\nthemselves the best chance at realizing long-term financial goals by\nmaintaining exposure to risk assets (like stocks) over long stretches of time, <\/em>in the realm of 20+ years. <\/p>\n\n\n\n The point of making \u201cfear your friend\u201d is so that as a savvy\nand experienced investor, you can see when fear bubbles form in the news \u2013 even\nas the U.S. economy continues to grow and economic data remains solid. When you\nrecognize those disconnects, between expectations\n<\/em>about future growth and realities <\/em>about\nfuture growth, it is easier to resist the urge to make kneejerk reactions to big\ndown days or endless media coverage of recessions and bear markets. It can help\nyou keep a steady hand, which in my view is the key to long-term investment\nsuccess. <\/p>\n\n\n\n![\"\"](\"https:\/\/zacksim.com\/blog\/wp-content\/uploads\/2022\/02\/2019-9-14-MOTM-Image-1-of-2.png\")
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