As I write this the S&P 500 is down almost 25% from its peak closing value on February 19, 2020. It is down 7.6% so far today.
If you look at the Shiller P/E (CAPE) ratio for the S&P 500 it currently stands at 24.05. The long-term mean CAPE ratio is 16.70. The last time the market was below that average was in early 2009 and it didn’t stay there very long. If you think it is going to return to that level then the market still has a long way to fall.
The real thing that is missing today is confidence in the future, and unfortunately our leaders have done a terrible job instilling that confidence. Without confidence investors tend to assume the worst, and panic rules the day. One measure of this is the volatility index or VIX, which currently stands at 65.96 . Up until early February it was staying between 12-14.
All of this means buying opportunities for those not already fully invested. I can’t tell you when the bottom will be. I have bought some on the way down, and will probably wait now until there is a sustained upward trend and the VIX quiets down before buying more. Yes that means I will miss the very bottom. Nobody can predict exactly when that will be, although many will claim to have done so after the fact.