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Big Scary Stock Market Sell-Offs Happen All Of The Time In Bull Markets

Sam Ro   

Big Scary Stock Market Sell-Offs Happen All Of The Time In Bull Markets
Stock Market1 min read

2015 has seen the S&P 500 fall from 4% the January 2 high of 2,072 to the January 6 low of 1,992.

And yet today, the S&P is trading at around 2,060. The index is positive for the year.

It's important to note that big sell-offs occur all of the time, even during years when the markets head higher. Even the Black Monday crash of 1987 was part of a bull market.

"Despite average intra-year drops of 14.2%, annual returns [have been] positive in 26 of 34 years," JP Morgan Funds' David Kelly said.

Kelly offers this chart of intra-year declines that we think every investor should pin to their walls.

Bottom line: Sell-offs happen. And sometimes they're big. But they're normal, and they're no reason to panic.

cotd intra year declinesJP Morgan Asset Management

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