Market Drops Are Common -- Investor Insights from Glen Eagle

Market Drops Are Common

August 12, 2024

Enjoy this week's "Investor Insights," a weekly newsletter that highlights the financial news you need and provides tips and tricks for making better investment decisions.

Despite the media’s focus on stock market drops, they are very common. Between 1928 and 2023, 94% of all years saw an S&P 500 drawdown of 5% or more; 64% saw a 10% drawdown; 40% saw a 15% drawdown; and 26% saw a 20% drawdown. _*1

Since 1980, after a 5% drop, the S&P 500 typically returned 6% over the next three months. However, market recoveries can vary widely. For example, after the tech bubble burst, the S&P 500 took seven years to regain the heights of 2000. _*2

17% of Americans between the ages of 25 and 35 currently live with their parents. That's up from a low of 7% in the 1970s and at the highest level since the 1940s. Of those adults living at home, 78% can't afford the median rent level of the county they reside in. ₃

The six stocks with $1 trillion-plus market caps (AAPL, AMZN, GOOGL, META, MSFT, NVDA) rose an average of 46.3% in early 2024. However, July was a tougher month, with these six stocks dropping 3.5%, while the S&P 500 gained over 1%. ₃

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Sources:

The Irrelevant Investor - "A Few Thoughts on the Selloff"
WSJ - "Market Turmoil Revives Age-Old Question: Should You Buy the Dip?"
MFS - "Beyond the News"

*Past performance is not indicative of future performance

Disclosure: This information is furnished for the use of Glen Eagle Advisors, LLC, Glen Eagle Wealth, LLC, and their clients and/or contacts. It does not constitute the provision of investment advice to any person. It is not prepared with respect to the specific objectives, financial situation, or particular needs of any specific person. Investors reading this commentary should consult with their Glen Eagle representative/financial advisor regarding the appropriateness of investing in any securities or adapting any investment strategies discussed or recommended in this newsletter.

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