As I have reported recently, it is not
unusual for the stock market to have a correction after a lengthy time on the
rise. Yesterday we saw that a correction can still be painful. The stock market
dropped a little over 2% yesterday, meaning that anyone in the market at that
time lost money. Although you are a long-term investor, that
is your money. A correction is usually about a 10% drop in the value of stocks.
This usually sets the stage for another increase in value. A day like yesterday
is generally followed by two to three days of the market rising before it again
tests the downside.
I believe that equity investments will
bring us rewards in the future as the economy grows and energy becomes
increasingly available. The road to those rewards will be bumpy, such as
what we saw yesterday.
Ed Mallon
