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August Mayhem: Time To Stay Cool š§
Did you know that more than 80% of the stock marketās best days occur within two weeks of the worst days?
Did you know that more than 80% of the stock marketās best days occur within two weeks of the worst days?
Missing just a few of the marketās best days can significantly impact your long-term returns, so it's important not to panic and sell during downturns.
In this edition of our newsletter, weāll look at the following:
August Volatility: First, weāll discover why August often turns out to be anything but calm for the markets š¢
Always Just One Data Point Away From Disaster: Next, we challenge the pervasive narrative of economic doom š¤Æ
The Fear Gauge Spiked To Over 66 Last Monday ā The Worst Is Probably Behind Us: Finally, weāll take a deep dive into the VIX, the so-called āfear gaugeā š
Stay informed and ready to make confident investment decisions with the insights provided in this issue. Letās go!
August Volatility š¢
So much for August being a quiet month for markets.
The truth is that August has a long track record for giving investors fits.
Last Mondayās dramatic selloff kick-started a week of chaos.
History shows that investors who bought the S&P 500 following a 5% or more decline are highly likely to make good money in the coming twelve month period š²š²š²
From mid-July through August 5, the stock market dipped by over 8%.
If you had the courage to buy, well done.
At a minimum, now is not the time to sell.
Always Just One Data Point Away From Disaster š¤Æ
Itās not just the media ā itās Jaime Dimon, itās every investor thatās interviewed on CNBC.
The other shoe is always just about to drop.
We are always on the edge.
But itās just not true.
The US economy has withstood one storm after another since 2020, and corporate America is strong, the banks are strong.
Wars are raging, interest rates are high, our politicians are crazy and many of our citizens are even crazier.
And yet, the economy has withstood it all ā°ļø
Itās unlikely to crumble now, just at the time when the Fed is on the verge of offering some relief from interest rate cuts.
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The Fear Gauge Spiked To Over 66 Last Monday ā The Worst Is Probably Behind Us š
The measure of fear in the stock market is the VIX.
It spiked from 12 all the way up to 66 on Monday of last week.
That tells you investors panicked š±
Usually when panic levels reach such an extreme, itās a sign that selling has reached a peak and a point of exhaustion.
Odds are that the summer low for stocks has been established.
While ripple effects are still likely, the worst of the selling is probably over.
Inner Circle Global Macro Update š
If you wish to gain access to our Inner Circle Global Macro Update, packed with exclusive insights from award-winning portfolio manager and economist Seth Antiles, with secrets thatāll give you an edge in the stock market, be sure to upgrade by clicking the button below šļø