The Nasdaq is already in correction territory, and the S&P 500 isn’t far behind.
By definition, a correction happens when a stock index drops 10% or more from its recent high.
And right now, the number one question I keep getting is:
“Where is the stock market heading?”
Some folks turn to technical analysis to find the answer — looking at past patterns to predict where the market is going next. I’ve been there myself.
When I started trading on the floor of the New York Futures Exchange more than 40 years ago, I also used technical analysis.
I quickly learned that chart patterns are open to interpretation — what one trader sees as a bullish sign may be seen as bearish by another.
Just last week, I re-tweeted a chart on X (formerly Twitter) that made the rounds.
The post, tongue-in-cheek, said, “It’s pretty obvious where the market is heading.”
Looking at the so-called “technical analysis,” it sure seemed like a clear call…
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Why Long-Term Investors are Up 120X
Trying to predict the stock market’s short-term wiggles and jiggles is difficult at best and impossible at worst.
The smarter move? Step back and take the 10,000-foot view.
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Instead of obsessing over the recent Nasdaq pullback, let’s zoom out and examine its performance over the past 30+ years.
- Back in the early 1990s, the Nasdaq 100 dropped to a low of around 162.
- Today, the Nasdaq 100 is trading at around 19,600 — an increase of nearly 12,000%.
- That means a $1,000 investment back then would be worth more than $120,000 today — a 121X return.
Turn Down the Volume!
The biggest risk isn’t staying in — it’s being out when the next big move happens.
What we’re seeing now is the financial media running around like chickens without their heads screaming about a market meltdown.
But Real Talk: None of this matters to long-term investors. Not one bit. And let me share with you why.
When Wall Street gets spooked — over tariffs, global recession fears or whatever else — uncertainty drives volatility.
And over the long term, volatility is just noise.
When investors panic over macro headlines, they forget a simple truth: Stock prices move based on emotions, but business values don’t.
In other words, fear drives markets. Fundamentals drive wealth.
I can’t tell you when it will stop — but here’s what I do know: it will eventually stop.
That’s just how markets work.
After a big rally, there’s always a pullback.
Timing these swings is impossible.
That’s why we use an approach to find great businesses in mega trend industries, led by rockstar CEOs and buy when the stock is trading at a great price.
Because the business drives the stock price higher.
Here’s what I want you to keep in mind:
- At some point, the selling will stop.
- When stocks rebound, they’ll move fast — faster than most investors can react.
- The biggest risk isn’t staying in — it’s being out when the recovery happens.
Markets move in cycles. We’ve seen this before, and we’ll see it again.
The investors who stay disciplined will reap the rewards when the dust settles.
Stay the course.
Regards,
Charles Mizrahi
Founder, Alpha Investor
