Hey all! Well, April has arrived along with Spring, warm weather, and suffocating pollen. But, there isn’t a much better time of year to live in the South.
Now that Easter is in the rearview mirror, up next is The Masters tournament! And, I’m very happy to announce that I’m attending Thursday’s round this year (first official Master’s round ever!). I truly can’t wait, but that’s not the point of my blog (recall that right around this same time last year, we were bemoaning the stock market decline and related volatility).
I want to keep this one short, because as much noise as there has been around the recent market decline, you’d think things were awful! But, as I pointed out in my January blog, not only is this volatility expected, but frankly, it isn’t even what we’d get in a typical mid-term election year. So, as the title suggests: this has been nothing surprising at all…at least so far.
Frankly, I think this is a good time to go back and read the entire blog b/c when this was written, markets were still going higher, so much so, there was talk of market bubbles. Well, that narrative has changed into one of uncertainty and fear. Of course, that also can and will change if things begin to improve. And, in case you haven’t already noticed this, “price drives sentiment.” In other words, people feel great when things are going up and bad when they are going down. That’s why the market preys on human emotion and will absolutely make fools of investors who trade on “gut feelings” or fear or greed or any other emotion for that matter.
Here’s last month’s blog for reference: https://lineawealth.com/justins-market-musings-i-what-to-expect-i-january-22-2026/
- But, I want to draw attention to one specific stat within that post to reinforce the title of this month’s blog:
To make this easy, the AVERAGE correction during Midterm Election Years going back to 1950 is 16.2%. That’s an average! So far, the S&P 500 has only seen a 9.4% decline from recent all-time highs. I could argue that with the Iran conflict going on, inflation stubbornly sticking around and a market that was somewhat expensive, that this year could very well experience an above average correction. And, to be clear, we still may see that. As I write this, we are seeing a bit of a bounce in markets, but I don’t think we are out of the woods just yet, so near-term caution is still warranted.
I’m on record for suggesting a weak year is in store, and in fact, I think that would be quite healthy for the bull market to sustain another few years. But, don’t ever count this market out. We’ve seen a 100 year pandemic (2020), an inflation-induced bear market (2022), a 3 year war (and counting) in Ukraine (2022-2026), a tariff tantrum (2025), and now a war in IRAN just in the last 5-6 years and the market has just kept on grinding higher. I can’t say what tomorrow holds, much less 9-12 months from now, but it is never a good idea to bet against US stocks, the US consumer and the US economy. We certainly aren’t going to start now.
Until next time…
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