There were definitely some jitters and worries among Wall Street professionals last week. It was difficult to plan them for their concerns after viewing all of the carnage that was taking place on the Street at that particular moment in time. The Dow Jones Industrial Average lost more than 1,100 points in a single day last week. However, it has since rebounded and appears to be on track to make up some of that loss.
There are some now who are saying that the bull market appears safe for the time being given recent results says CNBC. Those who buy into this theory say that corrections are typical in the market and that much of the public overreacted to the trading taking place last week.
Historical data backs up at least some of what those who think this was an overreaction are feeling. The data suggests that in fewer than half of all corrections does the market actually turn into a full-blown bear market. This information might give some traders a little bit of comfort. At the very least they can accept the idea that they are not that likely to see their holdings evaporate away in a bear market.
While there are plenty who are telling us that we should all calm down at least a little bit, they are not going out on a limb to say that we will be breaking through new highs in the market anytime soon. We have done that all too frequently as of late, and many are supposing that we are not about to reclaim all of the losses that we just shed.
There is something to be said for having a healthy correction in the market from time to time. Having a drop off means that the market can pick back up and continue on to greater numbers at some point down the line. It is better than having an overheated market that just pops on everyone at the end. Instead, the kind of market activity that we have seen as of late is exactly what a person would want to see if they are hoping to ride the market on to new highs.
A lot of volatility remains in the market as of right now. However, it is probably not the best time in the world to do anything dramatic with your investments. There are too many ways in which trading on emotion right now could go very wrong.