DON’T PANIC

Even taking the market last Friday the biggest decline for seven month but in the last three days the market recovered partly. This week we have been up each day, the last week massacre has gone.

I remember well this Monday, only two days back there was a doomsday sentiment in all media and investors were close to panic. Don’t do that! It is only the normal process of the market. The US markets dropped only from the tops less than 5%, Nasdaq plunged below 2%.

The size of the correction is huge? Exactly not.

 

• 5% correction is nothing. Happens at least three times a year. 
• 10% correction is more serious and has not happened since 2012, normally it occurs each year.. 
• 20% correction could mean the end of the bulls. It happens in each 2-3 years. We are still far from that. 

We have been in 2013 in a so comfortable market climate, there was not any volatility. My bet in 2014 we are going to see much wider volatility in US markets. We have been almost forgot how looks like a real correction. So, you shouldn’t panic we only need to remember the market typically behave in up and down mood. Without correction the markets could not go up again to new highs, it is imminent part of bull rallies.

The BFM Assets Team.