By Ben Carlson, CFA
A Wealth of Common Sense
In 2018, from late September through Christmas Eve, the S&P 500® Index was down 19.8%.
This move seemingly came out of nowhere. There was no black swan event to blame. Fundamentals in the market were fine. No economic shock.
There was really no reason for this near-bear market.
Our brains don’t do well with randomness, so investors are constantly in search of a narrative to fill the void when there is no clear explanation for certain market moves. It makes us feel more in control if we can attach a “why,” even if sometimes there is no true explanation.