Single file, everyone, and please stay calm as you head for the doors -- we're going to try to make this correction as orderly as possible.
Wouldn't it be just great if market corrections were all nice, friendly affairs where everyone sort of agrees that, yes, it is a jolly good time for a correction? I'm picturing a warm, sunny afternoon with a bunch of guys sitting on a porch drinking lemonade and saying, "You know what we could use? A correction in that stock market." Everyone smiles and nods in agreement, and then they go back to enjoying their beverages.
Unfortunately, corrections, by their nature, tend to be messy affairs. If everyone were in agreement about a correction, there'd be no need for one. Up until midway through last year, we all seemed to think that things were pretty hunky-dory, but those nasty oil prices and hostilities overseas shook it all up. When the market fell, we started to hear about how we were heading into a protracted bear market. We've seen how that worked out.
As tempting as it is to tune in to the talk about what the overall market is going to do for the next six months or a year, it's a sucker's game for most people. Somebody out there will get it exactly right, but with so many people making predictions, it'd be statistically impossible for somebody not to get it right. I'm sure somebody has also already correctly predicted who's going to win the Super Bowl next year.
The Foolish takeaway from all this? Avoid giving too much credence to any broad-brushstroke market predictions. When the market is really in trouble and headed for a painful fall, most people will be whistling Dixie anyway. Buying stocks of quality companies at reasonable prices and holding them through the vicissitudes of the market seems to work out pretty well.
Think I'm nuts? Bring your thoughts here.