Four charts from the past week that tell a story about the markets and investing. You can check out our other blog post for this week here: “How Is Income in Retirement Taxed”.

Percentage of Days Down
US stocks have declined 1% or more in one out of four days so far in 2022. The only other years since 1990 with higher readings were 2002 and 2008.

Percentage of Days Down 1%

The consumer-price index rose 8.2% in September from a year earlier. Here’s the breakdown of price increases over last year:

Fuel oil: +58.1%
Gas utilities: +33.1%
Gasoline: +18.2%
Electricity: +15.5%
Transportation: +14.6%
Food at home: +13.0%
New cars: +9.4%
Overall CPI: +8.2%
Used Cars: +7.2%
Shelter: +6.6%

Thursday’s Big Reversal
On Thursday, the S&P 500 closed 5% off the lows and was coming off a one year low. This has happened before in March 2009, December 2018, and March 2020. Those all ended up being market bottoms.

Big Reversal

Bull and Bear Markets
It’s not easy owning stocks during down markets. But what we know from history is that bull markets are built on the shoulders of bear markets.

Bear vs Bull

Buying Opportunity?
Since WWII, the S&P 500 finished the year down more than 20% only three times: 1974, 2002, and 2008.

The following year stocks gained 31.5%, 26.4%, and 23.5%.

You are never going to buy the bottom, but if you can stomach the pain, you are usually rewarded long term.

US Stock Returns Following Declines

And that’s it for this week. For more frequent updates follow my Twitter @ChicagoAdvisor. Have a great weekend everyone!


Bull and Bear Market Chart from Callie Cox on Twitter

It was the first time that the Dow Jones Industrial Average both fell at least 500 points and rose at least 800 points in a single trading from Wall Street Journal

S&P 500 5% Off The lows and coming off a 52-week low from Ryan Detrick

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly.

This is a hypothetical example and is not representative of any specific situation. Your results will vary. The hypothetical rates of return used do not reflect the deduction of fees and charges inherent to investing.