Goldman Sachs strategists remind investors that buying stocks after a price drop of the magnitude seen in the US since mid-July is usually profitable for investors, reports Bloomberg.
A team of strategists led by David Kostin pointed out that since 1980, the average return the S&P 500 has posted in the three-month period after the index had previously fallen 5 percent below its most recent peak was 6 percent. This was true in 84 percent of cases. Bloomberg reminds that the S&P500 index has already fallen 8.5 percent since the peak reached in mid-July.
"Corrections of ten percent or more also tended to create attractive buying opportunities," the bank's strategists said, but noted that this was not as common as in smaller market declines.
On Monday, the broad American stock market index S&P500 contracted the most since September 2022. It was a continuation of the sell-off triggered by growing fears that the Fed will delay easing monetary policy, which could lead to a recession.
JPMorgan Chase & Co. quantitative strategists reported that institutional investors bought cheap stocks on Monday. During the session, they invested a total of about 14 billion in them. dollars, and at the time of closing sold securities for 6.7 billion. dollars.
