The S&P 500 is down 12% year to date as I write this. And the NASDAQ (mostly) tech average is down almost 20%. So are stocks a screaming buy right now?
It’s always a good idea to put things into perspective. Let’s take a stock like Microsoft. Microsoft is down 15% so far this year. Does that make it a bargain? Microsoft is trading a $290 a share this morning. But let’s rewind to a year ago. A year ago Microsoft was trading a $250. So if we weren’t piling into Microsoft at $250, why is it such a bargain at $290? It feels like it because it’s down 15% this year. But the magnitude of the sell off (thus far anyway) doesn’t equal the big run up from last year.
Always keep things in perspective and ask the one really important question. Regardless of the recent moves in my stock, is it a true bargain right now?