Is the Recent Market Decline a Sell Signal?

The market has been particularly volatile since mid August and has fallen over 10% since May 21st. A 10% decline in the stock market is often referred to as a “correction.” What is an investor to do after such a decline? This month we have a guest blog post from Weston Wellington, a Vice President at Dimensional Fund Advisors. He tackles this issue in the article, Should Investors Sell After a Correction?

The article echoes our belief that volatility is to be expected from the market and that after significant declines, markets have historically posted very strong returns. If an investor tries to time when to get out of the market they also have to time when to get back in. If they do not get the timing just right they historically would have missed out of significant positive performance.


Index Performance                                 Sept.      3Q     YTD   Trl 1Yr       

US Stock (Russell 3000)                              -2.91%   -7.25% -5.45% -0.49%
Foreign Stock (FTSE AW ex US)                -4.53% -11.96% -7.74% -11.11%
Total US Bond Mkt. (BarCap Aggregate)   0.68%    1.23%   1.13%   2.94%
Short US Gov. Bonds (BarCap Gov 1-5 Yr) 0.51%   0.68%  1.59%   2.05%
Municipal Bonds (BarCap 1-10yr Muni)    0.63%    1.32%  1.64%    2.22%
Cash (ML 3Month T-Bill)                              0.00%   0.01% 0.02%   0.02%



Raffa Wealth Management is an independent investment advisor providing nonprofit organizations, high net-worth investors, and qualified retirement plans with a full range of investment consulting services.  We were established to fill the need for transparency, clarity, and vision in the professional management of investment assets.   Visit us at


There is no guarantee that any investment strategy, including those described here, will be successful. Any investment or investment strategy can lose money. Past performance does not guarantee or predict future results. You should not assume that any discussion or information contained herein serves as the receipt of, or as a substitute for, personalized investment advice from Raffa Wealth Management, LLC. This information was gathered from reliable sources, but we cannot guarantee accuracy. Indexes do not reflect the fees associated with actual investments and such fees would reduce the performance illustrated. Source: FMG Suite, LLC.
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