SPYX - S&P 500: The Psychology Behind Corrections And Why Investors Should Buy The Dip

2024-07-23 05:55:46 ET

Summary

• The widely anticipated pullback has been relatively mild so far. The SPX merely lost -2.9% from its all-time highs before rebounding in the last trading session.
• For disciplined investors with a robust investment plan in place, whether the eventual outcome is a 5% dip or a decent correction of 10%-15% really shouldn't matter that much.
• Many begin their investment journey thinking like investors but end up behaving like traders because they fall into the trap of thinking that they can do much better than buy-and-hold.
• We are skeptical that this pullback is an early warning sign of a bear market. Recent economic data continues to reinforce our view of a robust macroeconomic outlook and favorable conditions for equities.
• Although we are bullish on U.S. equities in general, we are maintaining our "Hold" rating on the SPX. Instead, we prefer an equal-weighted index like the Invesco S&P 500® Equal Weight ETF, which we maintain a "Buy" rating.

Signs of fear are making the headlines again after the S&P 500 Index ( SPX ) came under moderate selling pressure over the past few trading sessions. The widely anticipated pullback has been relatively mild so far. As of Friday's close, the SPX was down by merely -2.9% from its all-time highs before staging a rebound in the last trading session. ...

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