Von Aldo

The Dow Is Off by 12% Since April 23 Peek. A Buying Opportunity?

Just how bad has the market been acting recently? Catch-your-breath bad. Here are some fun facts to know and tell about the market's recent correction. A friend sent me this research note from an advisor from Morgan Stanley. The comments at bottom are from the financial advisor who is saying: Time to buy.

Morgan Stanley notes that from the peek of the Dow Jones on April 23rd, we are down just about 12%.

Since 1962, there have been 24 declines of 10% or more after a market run up of more than 25%.

Only 9 of the declines ended up resulting in a “new” bear market. So, the odds are that we have a 63% chance of this being a correction, not a new bear.

So, what do you do?

In the 30 days period post the declines of 10% or more since 1962, the market was 2% higher and over 20% higher a year later.

"Well, says the advisor, there are lies, damn lies and Dow Jones statistics since 1962.

"Lets say they are half right at Morgan Stanley and the market is 10% higher in 1 year. Dow 11,000 does not sound so bad, does it?

"I believe that the market may afford you a significant opportunity to you for a total return

on any new money invested," says the advisor.

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