The Stock Market Has Turned Nasty. It Was Long Overdue.
There are few indications so far that trading losses in those instruments — or in the battered cryptocurrency
markets — have damaged the overall financial system, but that is a worry in a serious downturn.
Well, now the ax has fallen and the stock market has begun a “correction” — financial jargon for a decline of at least 10 percent.
Last summer, when stock valuations seemed too rich, I followed my own advice
and began to rebalance my 401(k) portfolio, reducing the ballooning proportion of stock, increasing short-term bonds and cash.
Recall that in June 2016, after British voters said they wanted to leave the European
Union, the stock markets fell into what seemed, at the time, to be a major panic.
Mr. Mehta’s view, which I share, is that a stock market decline of the kind we have been experiencing was overdue
and that there is probably even greater volatility ahead.