Santoli wrote another piece about stocks going up. Stocks went down briefly in July. Now they're back up. The market gods—his phrasing, not mine—apparently wanted more suffering.
Here's what happened: nothing. The S&P 500 dropped for three weeks. Retail traders panic-sold their Nvidia shares at a loss. The index recovered. Everyone who held through it made money. Everyone who sold bought back in higher. This pattern has repeated for a century but Dave from accounting still hasn't figured it out.
The piece mentions stocks have never lost money over any 20-year period. One hundred percent hit rate. Which means if you bought stocks in 2006 and held until now, you made money despite the financial crisis, despite COVID, despite whatever the f*ck happened in 2022. But you didn't hold. You sold in March 2020 because Jim Cramer looked scared.
Santoli warns investors about "genuine hazard in equities." The genuine hazard is you. Not inflation. Not interest rates. You. Your hands. Your brain telling those hands to sell after reading headlines about brief pain. July's pullback lasted shorter than most people's attention spans and here we are discussing whether it was enough punishment.
The market gods aren't real. There's no divine entity demanding retail traders suffer before granting returns. But if there were, they'd be pretty disappointed. Three weeks of a 6% drawdown isn't pain. It's a rounding error. It's what happens when algos rebalance and everyone pretends it means something.
The winning history continues because companies make money and you can't time tops. The losing history of your portfolio continues because you think July 2024 was different.
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