Well, wow. That was a pretty terrible month with the S&P 500 falling 11% for the month (down more than 13% YTD). The Naz, of course, had it even worse, falling nearly 16% this month (down more than 21% YTD). And then there's AARK, the poster-child of Covid-risk-on-excess, down 34% for the month (down more than 50% YTD).
The thing is, at least for the broad indexes, none of these drawdowns is historically unusual and the S&P isn't even in a bear market (usually defined as 20% or more off the highs). So I don't think it's over and expect more pain in May if, for no other reason, we are headed into a historically and seasonally bad time of year with a Fed (which meets next week) about to tighten more aggressively, among other things.
My only question is whether we take a quick elevator down next week or whether this grinds out over a few months. Either way, before the end of this I'd expect a few monster rallies of "hope" as we look for a bottom, followed by disappointing reversals until we get a real purge. Then, and only then, can we start over.
Of course, none of this matters if you're diversified and in for the long haul, so take it with a grain of salt and, if you're like me, watch for attractive entry points to deploy excess cash. |