The market meltdown everyone saw coming
1. Explaining the Correction with Perfect Hindsight (Barry Ritholtz, 10/15/2018)
“We interrupt this regularly scheduled correction to bring you an after the fact narrative explaining in great detail and with utter certainty what just occurred in the markets, and why.”
A bright side to last week’s pain
2. Who Benefits From a Market Correction? (A Wealth of Common Sense, Ben Carlson, 10/12/2018)
“The swift market sell-off we’ve experienced this week is painful for anyone in the stock market. Investments outside the U.S. have done even worse. Now is a good time to remind yourself that there’s a bright side to this pain.
To work through this dichotomy, here’s a list of those who would benefit the most from a continued stock market sell-off:”
Why we diversify portfolios
3. Diversification Works When You Need It Most (Servo, Eric Nelson, 10/15/2018)
“While we cannot be certain that history will repeat, it should none-the-less be comforting to diversified investors to know that there have been many periods when well-balanced portfolios have failed to exceed the return on the S&P 500, despite higher expected returns. But these have typically been periods when the S&P 500 is experiencing above-average gains, not the type of environment where diversification is needed to generate even higher results. When S&P 500 returns eventually disappoint — often after a stretch of above-average returns — a diversified portfolio seems to have its best relative returns. Said differently, diversification works when you need it most.”
Chart Source: Servowealth.com
Bonus if you’re still reading this post
Future Perfect (Vox) arrived in today’s In-Box:
“Every Tuesday and Friday, the Future Perfect team at Vox will offer a rundown of the biggest news that people trying to change the world need, with a little bit of analysis on top.
If you’re a die-hard effective altruist who’s passionate about ending factory farming or fighting global poverty or preventing a nuclear or AI armageddon, you’ve come to the right place.
If you’ve never heard the phrase “effective altruism” but are just interested in finding the best ways to do good, you’re in the right place too. This is a place for anyone who is curious and open-minded, and wants to hear about surprising ways scientists, activists, charities, and others are trying to solve the world’s biggest problems.“
Sign up here.
SAGE Serendipity: This is clever. The New Yorker Magazine made a video of actor Jon Hamm trying his hand at the cartoon-caption contest. How to Write a New Yorker Cartoon Caption: Jon Hamm Edition.