Market history · Equities ·
The December 2018 sell-off
The S&P 500 fell by close to 20% between its record on 20 September and 24 December 2018, and December was the Dow's worst December since 1931. Investors were worried about slowing global growth, the trade war and the Fed's rate rises; it raised rates a fourth time that year on 19 December to 2.25–2.50%.
Markets rebounded sharply from the start of 2019 after the Fed signalled patience, and the year finished with strong returns.
The takeaway
Sharp falls can reverse quickly when policy expectations change; timing them is very hard.
This is a retrospective about a past event, provided for general information. It is not investment advice, does not describe RockLake's positioning at the time, and past performance is not a guide to future performance. Read the risk warning.