Weekly ChartStorm — Current drawdown in SPX is tracking vs history
Perspective Check: Here’s how the current drawdown in the S&P500 $S&P 500(.SPX)$ is tracking vs history — it’s basically just noise at this stage…
But the reason I picked this chart is it serves as a timely risk-management reminder:
5-10% corrections are fairly common,
10-20% corrections are not uncommon,
and 20-30%+ downsides happen about at least once a decade (so if you invest for long enough, you *definitely will* experience at least one major downturn)
It’s a reminder to be prepared, either through process (e.g. having a good objective and reliable approach to lighten exposure to downside in bear markets, and paying attention to asset allocation and smart diversification) and/or psychology (having the right mindset to stay the course, having the resilience to stick with the plan and trust the process but also mental flexibility to change when needed).
We might disagree on the risk outlook or the prospects of when the next big downturn may come, but I think most of us can probably agree on the importance of thinking and preparing for it before hand (because figuring out the right mindset or movements during the downturn may well be too late).
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