Is the financial market continuing to be sluggish? Should we be worried about a fall?

Author: Anthony Pompliano, Founder and CEO of Professional Capital Management; Translated by: Shaw Jinse Finance

Recently, the financial markets have been bleak. Technology stocks, Bitcoin, and many other investment assets have fallen into a downward spiral. It seems that nothing is immune to the downturn. Bloomberg's Eric Balchunas pointed out that all assets are declining, including short-term government bonds.

This sell-off makes people wonder: “Is this bull market over?”

The answer is much more complicated than you think.

Taking stocks as an example. Ryan Detrick of Carson Group has analyzed the performance of different trading days during the week.

The chart shows that Monday, Tuesday, and Wednesday performed well, while Thursday and Friday saw a decline. Therefore, the recent drop aligns with the overall market trend this year.

There is nothing to worry about. In fact, Balchunas explained that overall, the trading volume of the S&P 500 Index may be a positive signal.

“If there is any good news, it is that the trading volume of the S&P 500 ETF ($SPY) is relatively moderate; we can see that the volume has increased, but it hasn't even entered the top 20 for the year. Typically, this indicates that the sell-off is temporary, while high volume suggests more severe panic, but who knows.”

Has the bull market in the stock market ended? Perhaps not yet, but anything is possible. This could potentially be one of the shortest bull markets in history. But that doesn't mean it can't happen.

Dan Ives of Wedbush remains bullish on tech stocks. Regarding the recent sell-off, he stated: “We believe this is merely a temporary panic in tech stocks, as we expect that as investors seek to participate in the artificial intelligence revolution and the second, third, and fourth waves of derivative effects currently emerging in the consumer/business sectors, tech stocks will experience a strong rebound for the remainder of the year.”

Bitcoin has also seen a decline. This asset is known for its asymmetry, but investors have been relatively disappointed with its performance so far this year. Joe Consorti wrote, “Bitcoin has only increased by 4.2% so far this year, while the S&P 500 and Nasdaq indexes have risen by 14.5% and 18.9%, respectively.”

This is not the reason why many investors buy the asset. They are pursuing explosive growth, rather than sideways consolidation that underperforms major stock indices. On the other hand, Bitcoin has only risen 6% in the past year, but it has increased by 500% over the past five years.

Investing is difficult. Different assets perform differently at different times. Coupled with the uncertainties of monetary policy, geopolitics, and capital flows, the complex economic system is hard to predict.

But what reassures me is that even in a market downturn like the one we are currently experiencing, truly outstanding companies will ultimately maintain good performance in the long run. Bitcoin will also thrive in the coming years. Those who are worried due to certain price fluctuations are more likely to make wrong decisions. Those who can buy quality assets and hold them for the long term will ultimately reap substantial rewards. There is a reason why this timeless investment principle has endured.

Stay calm, believe that good weather will eventually come.