Buying When Stocks Down Big

One of the best recent articles I’ve read from Ben Carlson:

“Small-cap stocks have been hit even harder than they’re large-cap brethren. The Russell 2000 is down almost 24%. If this were to hold over the next week or so, this would be the 4th worst quarter…ever.”

He then talks about forward returns using some charts but here’s the average after the 10 worst quarters since 79 of the Russel:

One Year Return +32%
Three Year +73%
Five Year +130%

Again, great, quick read. If your magic ball didn’t predict this down turn and tell you to go to cash before hand, probably not a good idea to sell now when everyone is panicking. Especially with those types of historical averages after these big drops.…