Year to date, the S&P 500 is up 13% and the Nasdaq Composite up 15%, despite inflation, elevated bond yields and midterm elections, and the article says the next downturn is only a matter of time. Since 2010, the S&P 500 has had 10 corrections, 2 of which became bear markets, with average 12-month returns of 18% after its first close in correction territory and 38% after entering a bear market. The Nasdaq Composite has had 14 corrections, 4 of which became bear markets, with average one-year returns of 23% after a correction and 39% after a bear market. Citing history, the article argues that buying the dip is the smartest move investors can make when markets fall, noting that losses have always been recovered and rebounds have typically been swift. The S&P 500 covers 500 large US companies representing 80% of US equities by market value, while the Nasdaq is heavily weighted toward technology.
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- History Says a Stock Market Downturn Is Coming , and Investors Should Do This When It Happens
Year to date, the S&P 500 and Nasdaq Composite have risen 13% and 15%, respectively, despite uncertainty over inflation, elevated bond yields and midterm elections. The author argues that a market downturn is inevitable and that history favors buying the dip. Since 2010, the S&P 500 has had 10 corrections, two of which became bear markets, and it has averaged an 18% gain over the 12 months after first closing in correction territory. The Nasdaq Composite has had 14 corrections and four bear markets over the same period, with an average 12-month return of 23% after its first correction close. Both indexes have always recovered their losses, typically swiftly.
- History Says a Stock Market Correction Is Coming Eventually. Here's the Good News for Investors.
The article argues that a stock market correction, defined as a decline of at least 10%, will eventually happen, though it is not imminent given the strong economy and the market's resilience to the energy price spike from the Persian Gulf war. Corrections occur on average every 2.2 years, with an average decline of 21% including bear markets, and typically last about 115 days according to Yardeni Research. The U.S. market recovered from the 2022 correction and last year's correction and went on to reach new highs. For investors within three years of retirement, the author suggests becoming more defensive by increasing bonds, safe assets and defensive sectors such as healthcare, utilities and consumer staples, along with non-correlated assets like real estate, precious metals and commodities. Others should stick to their plan and avoid panic selling, keep three to six months of expenses in cash, and rebalance concentrated positions.
- The Bond Market Is Flashing a Warning Not Seen in Decades , and History Says Investors Should Buckle Up
The 10-year U.S. Treasury yield recently crossed 5.3% for the first time since 2002, and the 30-year bond yields 5.57%. The author attributes the rise to persistent inflation (CPI now 3.4%), a $1.99 trillion fiscal 2026 deficit, heavy corporate borrowing for AI infrastructure, and weaker foreign demand for Treasuries. The author compares this with 1987, when yields surged before Black Monday, and 1999 to 2000, when 10-year yields topped 6% before the dot-com bubble burst; in 1994, by contrast, the S&P 500 ended down less than 2% despite rising yields. Valuations are near early-2000 levels, but earnings growth remains strong, as in 1994. The author suggests reducing exposure to stocks hurt by yields above 5%, such as utilities and REITs, and increasing exposure to banks, some energy stocks and blue-chip dividend stocks, while noting a downturn is not a foregone conclusion.
- The S&P 500 Is Expecting Something Extraordinary. History Says Investors Should Be Careful What They Wish For.
LSEG forecasts S&P 500 earnings to grow 31% year over year in the third quarter, driven mainly by tech and semiconductors, with energy also contributing. The forward P/E has eased slightly to 21, so the recent rally has been fueled by earnings growth rather than multiple expansion. The article argues much of this good news may already be priced in, so an earnings shortfall could trigger a 10% correction, the first in about a year and a half. It compares today’s AI-driven boom with 2021, 2010, 2004 and 2000, when growth above 30% in 2000 preceded the collapse of the tech bubble. About two-thirds of expected growth comes from AI-adjacent tech firms, and energy’s boost depends on oil prices tied to the Iran war, making the growth vulnerable to reversal.
- The Stock Market Is Echoing a Warning From the Dot-Com Bubble, and History Says Investors Should Make This 1 Move
The S&P 500 has hit record highs and gained about 100% over the past three calendar years plus 2026 to date, driven largely by enthusiasm for AI stocks. Nvidia has jumped 900% in five years and Micron 200% this year alone, while Amazon, Microsoft, Alphabet and Meta are expected to spend more than $700 billion this year. The article highlights the Buffett indicator, the total value of U.S. listed companies relative to GDP, at 238%, its highest ever and well above about 148% during the dot-com bubble. Although the S&P 500 fell after previous peaks in this indicator in 2000 and late 2021, it recovered and gained over the following years, so the author advises investors to hold their positions for the long term.
- The Stock Market Is Echoing a Warning From the Dot-Com Bubble, and History Says Investors Should Make This 1 Move
The S&P 500 has gained about 100% over the past three calendar years plus 2026 to date, driven largely by enthusiasm for AI, with Nvidia up 900% over five years and Micron up 200% this year alone. Amazon, Microsoft, Alphabet and Meta are expected to spend over $700 billion this year, raising doubts about whether the revenue will justify it. The Buffett indicator, which compares the value of U.S. listed companies with GDP, has reached 238%, its highest ever, versus about 148% during the dot-com bubble. The article notes that the S&P 500 fell after past peaks of this indicator in 2000 and late 2021, but recovered and gained over the following years. The author argues that investors should hold their positions for the long term rather than leave the market.
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