Since the lows in March of 2020, the stock market has doubled. Think about that for a moment. The S&P 500 closed at 2,237 on March 23 of that year and closed Friday at 4,432 an incredible 100%+ gain in 17 months. Numerous reasons have been cited, including the incredibly loose monetary policy that has been in place for years but went nuclear when COVID-19 showed up in the winter of 2020. Toss in the Reddit WallStreetBets crowd, which had government hand-outs to trade with while locked down at home, and you had all the ingredients for the proverbial melt-up.
The truly scary situation for investors is that the market hasn’t had a 5% correction in almost a year, which is very unusual. However, the past two weeks and Monday’s rout may be the beginning of the long-awaited sell-off. The difficult question for investors is what to do now.