caseyresearch.com / Justin Spittler / September 14, 2016
Volatility has come storming back…
For the past couple months, the stock market has been eerily quiet. Now, this wasn’t completely unexpected. After all, many traders on Wall Street take off all of August.
But this summer was abnormally calm.
The S&P 500 went 40 days without a 1% move. That was its longest stretch without a big move in decades.
When the market is this quiet, many investors let their guards down. They buy stocks they know are risky. They stop checking their portfolios. They forget to set “stop losses,” which will automatically sell a stock if it starts to tank.
We urged readers to not make these careless mistakes. As we explained on August 25, “periods of extreme calmness have preceded some of history’s biggest selloffs.”
We got a taste of that last week…
• On Friday, U.S. stocks plunged…
The S&P 500 plummeted 2.5%. The Dow fell 2.1%. And the Nasdaq fell 2.5%.
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