The Long Term Investor

HAVE A GREAT WEEKEND EVERYONE.

 

I was very busy this week. We are having an ART showing at our home next week for a Texas collectors group based in Dallas, Ft Worth, Austin, and elsewhere in the state. Window cleaner comes on Monday. Dogs will go to board for the one day. We have to finalize food later next week.

I have been making "wall cards" with information about each of the 60+ original paintings in the house. I am also making "display cards"....for the sculpture and some of the finer antiques and collectables.

I will stick the cards to the walls with painters tape. I tested it out and it does hold overnight.

It will be.....MAXIMUM CHAOS.....next week......although....we are just about ready already.

I also just got an invitation to submit paintings to be considered for a 2026 Exhibition in the Dallas/Ft Worth area next year. I will submit six paintings to the committee.

I have been digging out high resolution photos and mentally planing my submissions. I will do them one by one. I now have all the photos loaded onto the computer screen....so I am all organized and ready to start sending them in.

I need to write a couple of paragraphs about each one when I send each one.

 

What a nightmare.....SMOKIE. It is bad enough to have the financial and regular media doing 24/7. Now the markets. The futures are EXTREMELY volatile and now that will be translated into actual gains and losses for every shareholder even if you dont trade after-hours.

 

Here is the week to come.....it will mark the middle of March. AND.....BIG BUMMER......this next week (Saturday) is the.....Ides of March. I am surprized that the media is not fear-mongering this to investors. They fear-monger everything else so why not? "Misfortune and Doom"....sounds about right.

"The Ides of March is a day in the Roman calendar that falls on March 15. It is associated with misfortune and doom because it is the day that Roman dictator Julius Caesar was assassinated in 44 BCE."

Ok.....little detour.....here is next week.

Inflation in center focus amid tariff fears: What to know this week

https://finance.yahoo.com/news/infl...f-fears-what-to-know-this-week-113505833.html

(BOLD is my opinion OR what I consider important content)

"Stocks sank last week as a lack of clarity around President Donald Trump's tariff plans and what they could mean for the economy's overall trajectory gripped markets.

For the week, the S&P 500 (^GSPC) fell more than 3%, while the Dow Jones Industrial Average (^DJI) slid more than 2%, or about 1,000 points. The Nasdaq Composite (^IXIC) led the losses, falling almost 3.5%. The Nasdaq has now fallen more than 10% from its last record high in December and is in a correction.

In the week ahead key updates on inflation, with fresh readings on the Producer Price Index (PPI) and Consumer Price Index (CPI), will be in focus as investors look for any clues on how tariffs may impact the path forward for prices. Updates on inflation expectations and consumer sentiment are also on the calendar.

In a quieter week of corporate earnings releases, Oracle (ORCL) and Adobe (ADBE) will highlight the schedule.


Fed isn't 'in a hurry'

Friday's February jobs report came and went with few surprises. The US labor market added 151,000 jobs in the month, just below expectations, while the unemployment rate inched up to 4.1%. Economists largely read the report as better-than-feared, given other signs of economic growth slowing.

Bank of America US economist Shruti Mishra described the report as "mostly a sigh of relief." Markets continue to price in three interest rate cuts from the Federal Reserve in 2025, per Bloomberg data.

But the looming question for markets remains when the Federal Reserve will actually cut rates again. In a speech on Friday Federal Reserve Chair Jerome Powell said any further rate reductions likely aren't imminent.

"We do not need to be in a hurry and are well-positioned to wait for greater clarity," Powell said.

There will be no Fed speak in the week ahead as the central bank enters its blackout period ahead of its next meeting on March 18-19.

Price check

A fresh update on the pace of price increases is slated for release on Wednesday.

Wall Street economists expect February's CPI to show headline annual inflation of 2.9%, down from the 3% seen in January. Prices are anticipated to rise 0.3% on a month-over-month basis, per economist projections, below the 0.5% increase seen in January.

On a "core" basis, which strips out food and energy prices, CPI is expected to have risen 3.2% over last year in February, below the 3.3% seen in January. Monthly core price increases are anticipated to clock in at 0.3%, below the 0.4% seen the month prior.

Wells Fargo senior economist Sarah House wrote in a note to clients that the February CPI print is only expected to provide an "initial taste" of expected tariff impact on inflation data.

"Although we expect both headline and core inflation to tick down on a year-over-year basis in February, we anticipate it will start moving back up this spring and remain stuck near 3% for the duration of this year despite further easing in shelter inflation and growing signs of consumer fatigue," House wrote.

It's not a 'recession' trade yet

The recent market sell-off has been driven by weaker-than-expected economic data and fears of further softness caused by Trump's tariffs.

Economists at Morgan Stanley, JPMorgan, and Goldman Sachs have all downgraded their GDP forecasts for either the first quarter or the entire year. But what's notable within those calls is they aren't actually predicting an outright economic downturn. Instead, at least for now, it looks like more likely that the US economy won't grow at the robust pace many hoped. Not many economists are actually starting to talk about a recession. For instance, with Goldman Sachs' forecasting update, the probability of a recession in the next 12 months rose to 20% from 15% the year prior.

Companies aren't currently fearing recession either. Data from FactSet shows just 13 companies mentioned the word "recession" during S&P 500 earnings calls this quarter. This marked the lowest number of recession mentions since the first quarter of 2018.

This reflects that, for now, the stock market's repricing of the past few weeks is largely a resetting of expectations in a year many believed would be headlined by outperformance of the US economy.

"I don't think the economy is turning on a dime in a negative direction," former Council of Economic Advisors chairman Jason Furman told Yahoo Finance. "But everything on the uncertainty, sentiment, all of that is pushing toward slowing.""

MY COMMENT

YES....yet another week of economic data......we NEVER get a break from this stuff which is CONSTANT now. AND....I swear the FED is slow walking any comments or action......in other words.....playing politics. I fear they will get us into a MILD recession with their little games.

it will be a typical VOLATILE week.......as there is much for the 24/7.....Media Morons.......to fear-monger up the Kazoo.

GOOD LUCK TO US ALL.

 

It is very CLEAR that the markets are in a CORRECTION. For people that have only been investing for a year or two.....WELCOME....to reality....this is your first correction.

Those of us that have been investing for longer are used to corrections. They usually happen once or twice a year.

In hindsight I would say that the current correction has been simmering since the first of the year and is now at least 4-6 weeks old. Often corrections will last for 1-4 months although there is no hard and fast rule it is possible for one to last longer. This one has been particularly nasty in the TECH area of the market. I would guess that it is going to last for at least another 1-2 months.

That does not mean that the markets will go down every day or every week. There will be gains some days and even some weeks......but the general direction will either be down or sitting on the down side for a while.....at least short term.

Correction

https://www.investopedia.com/terms/c/correction.asp

(BOLD is my opinion OR what I consider important content)

What Is a Correction?

In investing, a correction is usually defined as a decline of 10% or more in the price of a security from its most recent peak.1 Corrections can happen to individual assets, like an individual stock or bond, or to an index measuring a group of assets.

An asset, index, or market may fall into a correction either briefly or for sustained periods—days, weeks, months, or even longer. However, the average market correction is short-lived and lasts anywhere between three and four months.2

Investors, traders, and analysts use charting methods to predict and track corrections. Many factors can trigger a correction. From a large-scale macroeconomic shift to problems in a single company's management plan, the reasons behind a correction are as varied as the stocks, indexes, or markets they affect.


Key Takeaways

• A correction is a decline of 10% or greater in the price of a security, asset, or a financial market.
• Corrections can last anywhere from days to months, or even longer.
• While damaging in the short term, a correction can be positive, adjusting overvalued asset prices and providing buying opportunities.

How a Correction Works

Corrections are like that spider under your bed. You know it's there, lurking, but don't know when it will make its next appearance. While you might lose sleep over that spider, you shouldn't lose sleep over the possibility of a correction.

According to a 2018 report from CNBC and Goldman Sachs, the average correction for the S&P 500 lasted only four months and values fell around 13% before recovering.3 However, it is easy to see why an individual or novice investor may worry about a 10% or greater downward adjustment to the value of their portfolio assets during a correction. Many do not see it coming and don't know how long the correction will last. For those who remain in the market for the long term however, a correction is only a small pothole on the road to retirement savings.4 The market will eventually recover, so they should not panic.

Of course, a dramatic correction that occurs in the course of one trading session can be disastrous for a short-term or day trader and those traders who are extremely leveraged. These traders could see significant losses during times of corrections.

No one can pinpoint when a correction will start, end, or tell how drastic of a drop prices will take until after it's over. What analysts and investors can do is look at the data of past corrections and plan accordingly.

Charting a Correction

Corrections can sometimes be projected using market analysis, and by comparing one market index to another. Using this method an analyst may discover that an underperforming index may be followed closely by a similar index that is also underperforming. A steady trend of these similarities may be a sign that a market correction is imminent.

Technical analysts review price support and resistance levels to help predict when a reversal or consolidation may turn into a correction. Technical corrections happen when an asset or the entire market gets overinflated. Analysts use charting to track the changes over time in an asset, index, or market. Some of the tools they use to determine where to expect price support and resistance levels include Bollinger Bands®, envelope channels, and trendlines.

Preparing Investments for a Correction

Before a market correction, individual stocks may be strong or even outperforming. During a correction period, individual assets frequently perform poorly due to adverse market conditions. Corrections can create an ideal time to buy high-value assets at discounted prices. However, investors must still weigh the risks involved with purchases, as they could well see a further decline as the correction continues.

Protecting investments against corrections can be difficult, but doable. To deal with declining equity prices, investors can set stop-loss orders or stop-limit orders. The former is automatically triggered when a price hits a level pre-set by the investor. However, the transaction may not get executed at that price level if prices are falling fast.

The second stop order sets both a specified target price and an outside limit price for the trade. Stop-loss guarantees execution where stop-limit guarantees price. Stop orders should be regularly monitored, to ensure they reflect current market situations and true asset values. Also, many brokers will allow stop orders to expire after a period.

Investing During a Correction

While a correction can affect all equities, it often hits some equities harder than others. Small-cap, high-growth stocks in volatile sectors, like technology, tend to react the strongest.5 Other sectors are more buffered. Consumer staples stocks, for example, tend to be business cycle-proof, as they involve the production or retailing of necessities.6 So if a correction is caused by, or deepens into, an economic downturn, these stocks still perform.

Diversification also offers protection if it involves assets that perform in opposition to those being corrected, or those that are influenced by different factors. Bonds and investment vehicles have traditionally been a counterweight to equities, for example. Real or tangible assets, like commodities or real estate, are another option to financial assets like stocks.

Although market corrections can be challenging, and a 10% drop may significantly hurt many investment portfolios, corrections are sometimes considered positive for both the market and for investors. For the market, corrections can help to readjust and recalibrate asset valuations that may have become unsustainably high. For investors, corrections can provide both the opportunity to take advantage of discounted asset prices as well as to learn valuable lessons on how rapidly market environments can change.

Pros

• Creates buying opportunities into high-value stocks
• Can be mitigated by stop-loss/limit orders
• Calms overinflated markets

Cons

• Can lead to panic, overselling
• Harms short-term investors, leveraged traders
• Can turn into prolonged decline

Real-World Examples of a Correction

Market corrections occur relatively often. Between 1980 and 2020, the S&P 500 experienced 18 corrections.7 Five of these corrections resulted in bear markets, which are generally indicators of economic downturns.8 The others remained or transitioned back into bull markets, which are usually indicators of economic growth and stability.9

Take 2018, for example. In February 2018, two major indexes, the Dow Jones Industrial Average (DJIA) and the S&P 500, both experienced corrections, dropping by more than 10%. Both the Nasdaq and the S&P 500 also experienced corrections in late October 2018.10

Each time, the markets rebounded. Then another correction occurred Dec. 17, 2018, and both the DJIA and the S&P 500 dropped over 10%—the S&P 500 fell 15% from its all-time high.11 Declines continued into early January with predictions that the U.S. had finally ended a bear market abounding.12

The markets began to rally, erasing all the year's losses by the end of January. And by April 2019, the S&P 500 was up about 20% since the dark days of December.13"

MY COMMENT

Welcome to the world of investing. A correction is part of that experience. It does not matter if it is rational or irrational or what the cause is. It does not mean the bull market is necessarily over with. Corrections happen all the time in the middle of bull markets. But on the other hand they can be an indicator of the start of a bear market.

We will know how long the current correction will last....once it is over with.....hindsight. There is no way to predict this ahead of time. It could end tomorrow...it could last for another 4-6 months. NO ONE KNOWS or has the ability to predict anything that is meaningful or accurate.

This is why you do NOT want to invest short and medium term money in the stock markets. This is also why you dont want to invest beyond your RISK TOLERANCE. Some investors after the general gains of the BULL MARKET of the last 1.5 to 2 years are now going to learn these lessons.

 

Unfortunately some BABY BOOMERS are now learning a hard lesson about funding your retirement with personal assets.

When I retired at age 49......I had to live off personal assets till age 70. Now I live off Social Security and my Income Annuities. BUT....for years I lived off my own funds.

I was very careful to keep....AT LEAST.....three years of liquid money in CD's to pay for my living expenses. When the markets were BOOMING....I would replenish that money.....so it was kind of a rolling system. I did not just use up the three years of money and than re-fund the pot. I added to the cash pot....any time there was a good market nearing new highs.....to try to ALWAYS.....maintain three years of money.

Why three years? Because that was what I figured I would need in cash or cash equivalent to weather a bear market without having to dip into my stock money.....in the middle of a correction or bear market.

In fact....if you are going to be funding your own retirement for the rest of your life....perhaps as long as 30 or more years.....I would personally keep FIVE YEARS of "safe" money in CD's or other safe vehicles.

From my experience......funding your own retirement and managing the money in retirement is EXTREMELY DIFFICULT. Most if not ALL people are going to have a very difficult time doing this. It will be extremely RARE for anyone to be able to anticipate all their financial needs in retirement.

It is critical that people start to plan for their money management in retirement......at least....10-15 years in advance.

 

Typical for a correction and the recent markets.

Nvidia, Tesla stocks slip as 'Magnificent 7' names lead markets lower

https://finance.yahoo.com/news/nvid...ent-7-names-lead-markets-lower-130001560.html

 

I dont have to spend all day reading and posting.....in the current market. It is clear what is happening. I could not care less what is supposedly the cause or why it is happening. It simply DOES NOT MATTER. It is a process and you simply have to ENDURE the process. THERE IS BASICALLY NOTHING YOU CAN DO.

No....I am not going to do any market timing...that is a losers game.

I will simply sit and wait for it to end. I will also cut back on reading all the fear-mongering BS that will now be out in force. It is all BS....no one has any clue when it will end. There is no need to torture yourself....reading BALONEY about why the market is dropping.

The positive side of a correction is that it is a good thing for the market future. LOSSES lead to new market highs....when the inevitable positive market returns.

 

DUH....this is a pretty easy question to answer. The vast majority of people....do not want, need, or have any interest in this product. It is that simple. We are seeing the same thing with EV vehicles right now. A TINY percentage of the population.....perhaps 2-5%....is not enough to support most of these companies and their.....OVER-PROCESSED.....FAKE...products. (just my personal opinion)

You know for years now I have seen a small percentage of people advocate for "healthy eating" with a vegetarian diet. They also constantly rail against food items that are...."over-processed" and not "natural".

WELL....I give you the poster child for OVER-PROCESSED and UNNATURAL foods.....all the fake milks that are the rage...all the fake meats....and other NON-NATURAL products, etc, etc, etc.

SORRY......that is just my personal view. ANYONE....is free to do what they choose and how they eat.....I simply dont care......just dont treat it like a religion or try to impose it on me.

How Beyond Meat and the plant-based meat industry lost their allure

https://www.cnbc.com/2025/03/10/how...nt-based-meat-industry-lost-their-allure.html

 

I agree TireSmoke. The markets are now CAPTIVE to the government change over. Much of this "stuff" will hopefully be over in about 2-6 months. Securing the current tax law and rates, cutting bureaucracy and regulation, ramping up oil production, Illegal Immigration, and tariffs....are the big factors.

It is just going to take some time for things to.....settle in.

 

Ok....that is about it for me today....at least for now. As I said.....there is no need to oven-analyze what is going on or why. It is ALL simply speculation. It will ONLY be clear in hindsight.

At least anyone that is on any sort of investing plan or reinvesting dividends or capital gains....is getting some good cheap prices for their money. This is the KEY to COMPOUNDING. That is the positive of a correction.

 

I have a family member that is somewhat "vegetarian".....so at times I have had spaghetti sauce.....also meatballs, tacos, and some other meal items.....with "non-beef" beef. Generally I cant tell any difference between the product and "real" beef.....in those sorts of recipes. But....we dont use any of these products ourselves.

 

YES......STILL IGNORING the markets today. BORING.