We’ve had our long sought-after correction; now what?
The first phase is recovery. So far, we’ve gained back approximately 60% of what was lost. In time we may gain more. However, investors may be more discriminating selecting fewer companies to focus upon. Often after a correction, the new winners are not the past ones. Leadership changes. At first almost everything recovers some, but then the new leadership emerges.
It is unlikely that the market will simply go on to make higher and higher records at this point. More likely is a trading range. It is possible to make excellent returns in a trading range market. Even though the averages mark time, some groups and certain companies often do make higher and higher highs. We just must be attuned to where the opportunities are. Stay steady and prosper, my friends.
El Solo Toro