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Diversified Capital Management

Market Volatility

Time to Buy?  Time to Sell?

Can you remember the last time the market dropped this much?

How far back to we have to go to see markets this low?

Answer those two questions in your head before you continue to read.


Here are the actual answers:

The S&P 500 was at a high of 3360.76 on 2/21 and closed yesterday at 2978.76.  This is a loss of 382, or 11.37%.

In December of 2018, on the 13th of December the S&P hit a high for that day of 2670.19, and on the 26th the low was 2346.58.  This is a loss of 323.61, or 12.12%.

The last time the S&P was valued as low as 2978.76 was all the way back to, October 18, 2019.

So, in summary, we haven’t seen a loss like this in just over a year, and have lost all the gains of the last 5 months.  Doesn’t sound as bad as when I listen to the news.

So, is it time to buy or time to sell?

The general answer is no to both questions.

Trying to time the market is not our approach.  If you need to have regular cash flow, or have short-term cash flow needs, that should have been moved to conservative type holdings, or cash, when the need was known.  We need to plan ahead, not react to the market.

If you have a long-term investment plan, stick with it.  If that plan included adding more cash to the market, now is probably a good time to do that, not so much because the market is down, but more because long-term investment money should be allocated based on your risk tolerance, which normally means a good percentage of that will be in the equity market.

So, the take-away this week isn’t should I buy or sell, it is am I comfortable with my overall investment plan and asset allocation strategy.  If the answer is yes, do nothing,  If the answer is no, then we need to have a bigger discussion about how you should be invested, as opposed to making significant sells due to the recent decline.

Give us a call if you want to have a discussion.  315-472-6221