The sun is shining, the birds are chirping and yet, on Wall Street the worries over the implementation of Obamacare, the debt ceiling debate, the budget and oh, maybe Iran, Syria and a host of other intangibles are weighing on the markets this morning.
I’ve already written at length on just about all these topics so I don’t have much to add at this point. However, how about this bunch of silliness … You may have read all the seemingly dire articles about how the S&P 500 and the Dow were down for five straight days and heaven forbid, that they might be down a sixth day on Thursday.
Well, since it’s now Friday I can say with some assurance that no, we didn’t extend this 2013 streak. Whoa! I sure am happy about that. I mean, five straight down days and we lost … wait for it … a whopping 2.6% on the Dow. Horror of horrors.
Imagine if we’d had a sixth day of declines like, oh, the run from August 14 to August 21 when the Dow dropped more than 100 points in three of those days for a total decline of … 3.6%!
The Dow has hit 31 all-time highs this year. We’ve seen declines from some of those highs as large as 5.9% (January 8 — really a decline from levels set in 2012), a decline of 4.9% in June (as of June 24) and a decline of 5.6% in August (as of August 27).
All this rhetoric about 5-day and 6-day declines is ridiculous. When you read this stuff, keep in mind that most of these multi-day drops are simply backing-and-filling and just chatter in the long run performance of the stock market. In fact, we didn’t even have the typical summer swoon this year, that everyone seemed to be calling for, nor the horrible September dive (remember, September is supposed to be the worst month for the stock market.) At last night’s close the stock market is up 4.6% for the month.
Have a great weekend.
Daniel P. Wiener is editor of The Independent Adviser for Vanguard Investors, a monthly newsletter that keeps abreast of recent developments at Vanguard and the annual FFSA Independent Guide to the Vanguard Funds.