In 1993 I began my investment and money management career under the tuteldge of legendary hedge fund manager Monroe Trout. If you have never heard of Monroe Trout he is featured in the book New Market Wizards. The chapter about him is titled The Best Return That Low Risk Can Buy.
I spoke with Monroe every day for 6 years and one of the many things I remember him saying was: The markets are like playing baseball in the outfield. You could go 8 2/3 innings and not have a ball hit to you the entire game, but you better be ready at all times because you never know when a line drive is going to come screaming at your head. On Tuesday October 6th that line drive came screaming at the buy and hold stock market investor, as the market dropped -2% in twenty minutes when President Trump rejected the Democrats’ stimulus offer. Below is a two minute chart of the S&P 500 and is a reminder that the stock market has entered a new volatility regime and that RISK HAPPENS FAST. Click on the image to view more