UPDATE: Weekend roundup: What to do when stocks drop | Don't misuse a daily trading tool | Should investors fear rising U.S. wages?
By Philip van Doorn, MarketWatch
A brutal week for stocks highlights the importance of a longer-term perspective
MarketWatch rounded up 10 of its most interesting topics over the past week.
1. What to do when the market takes a frightening turn
The Dow Jones Industrial Average fell 4.6% on Monday, with all 30 component stocks declining (http://www.marketwatch.com/story/here-are-the-biggest-losers-among-dow-and-sp-500-stocks-in-mondays-rout-2018-02-05), and after Friday's improved action finished with a 9.1% decline from its record intraday high on Jan. 26. The S&P 500 index was down 8.8% from its intraday record high, also on Jan. 26. Here's what financial advisers say you should do when stocks reverse in such a dramatic way (http://www.marketwatch.com/story/the-stock-market-is-plunging-heres-what-advisers-say-you-should-do-2018-02-05).
More on market turmoil:
-- How to make sense of the stock market's wild ride (http://www.marketwatch.com/story/what-now-how-to-make-sense-of-the-markets-plunge-2018-02-06)
-- Did the stock market crash? Do the math and check the yield curve (http://www.marketwatch.com/story/was-that-a-stock-market-crash-do-the-math-and-check-the-yield-curve-2018-02-06)
2. The high cost of misusing a trading tool
You have probably heard a lot about the Cboe Volatility Index lately. Before the broad decline that started on Feb. 2, the U.S. stock market had shown remarkably low volatility for an extended period. But after Monday's dive, a trader said he "lost $4 million, 3 years worth of work, and other people's money (http://www.marketwatch.com/story/xiv-trader-ive-lost-4-million-3-years-of-work-and-other-peoples-money-2018-02-06)" by betting against market volatility by holding positions in the VelocityShares Daily Inverse VIX Short Term ETN (XIV). According to the Velocity Shares prospectus (http://app.velocitysharesetns.com/files/prospectus/CS_VIX_VelocityShares_ETN_Amended_Final_Pricing_Supplement_AR48_long_form_2.PDF) for its VIX-based ETNs, they are "intended to be trading tools for sophisticated investors to manage daily trading risks."
Also see:This guy just lost $10,000 trying to time the volatile market -- using his credit card (http://www.marketwatch.com/story/this-guy-lost-10000-trying-to-time-the-market-volatility-using-his-credit-card-2018-02-06)
3. You don't really know why the stock market did that
Rex Nutting questions why a 2.9% increase in wages over the past year would send stock investors into a panic, while taking a deep look at the figures and their effect on inflation (http://www.marketwatch.com/story/this-is-why-the-stock-market-is-wrong-to-fear-rising-wages-2018-02-07). Cullen Roche says don't bother looking for a fancy explanation -- but remember that stocks "generate surprisingly stable earnings and dividend yields (http://www.marketwatch.com/story/you-want-a-fancy-story-for-why-stocks-skidded-and-then-climbed-its-actually-pretty-simple-2018-02-06)" over the long term.
Also read: Jim Cramer blames a 'group of complete morons' for blowing up the market (http://www.marketwatch.com/story/jim-cramer-blames-a-group-of-complete-morons-for-blowing-up-the-market-2018-02-08)
4. Trump's 'big mistake'
President Trump called this week's dramatic stock-market decline "a big mistake," because of the strength of the U.S. economy. But Jeffry Bartash points out that if Trump is right about the economy, he is wrong about the stock market (http://www.marketwatch.com/story/if-trump-is-right-the-stock-selloff-is-a-big-mistake-it-will-be-because-hes-wrong-about-the-economy-2018-02-07).
Also see:This is what the stock market is seeing in the U.S. economy (http://www.marketwatch.com/story/this-is-what-the-stock-market-is-seeing-in-the-us-economy-2018-02-09)
5. Scared of bonds?
Turmoil in the stock market emphasizes how important it is to have a diversified portfolio that includes bonds (http://www.marketwatch.com/story/you-need-to-own-bonds-so-heres-how-to-overcome-your-fear-2018-02-08). But many investors aren't comfortable with them. Here are some tips on overcoming a fear of bonds.
6. Tesla's technology doesn't live up to its hype
These analysts look at seven big worries (http://www.marketwatch.com/story/7-big-worries-that-could-hammer-teslas-stock-price-2018-02-07) for the stock(TSLA) and spell out a case for a share-price target of just $45, even with fairly impressive operating results.
7. What next for Lululemon?
Lululemon Athletica Inc. (LULU) CEO Laurent Potdevin abruptly resigned this week. This sets up a golden opportunity for the company (http://www.marketwatch.com/story/lululemon-ceos-resignation-opens-the-door-for-former-ralph-lauren-ceo-stefan-larsson-2018-02-06), according to analysts.
8. Here's another way to boost the U.S. economy
Jillian Berman describes a research report on the potential economic benefits of canceling $1.4 trillion in U.S. student debt (http://www.marketwatch.com/story/canceling-14-trillion-in-student-debt-could-have-major-benefits-for-the-economy-2018-02-07).
Also see:Trump's tax code could hurt donations to lucrative college sports programs (http://www.marketwatch.com/story/trumps-tax-code-could-hurt-donations-to-these-lucrative-college-sports-progams-2018-02-06)
9. Timing your Social Security
Here's why it might be better to take Social Security at age 66 instead of 70 (http://www.marketwatch.com/story/why-it-might-be-better-to-take-social-security-at-age-66-instead-of-70-2018-02-02)
10. The best money books
Here are the eight best books on personal finance published during 2017 (http://www.marketwatch.com/story/these-are-8-of-the-best-money-books-published-in-2017-2018-02-05), according Goodreads reviewers.
Want more from MarketWatch? Check out our Personal Finance Daily (http://www.marketwatch.com/story/weekend-roundup-retailers-pain-a-former-insurance-ceo-on-obamacare-the-wisdom-of-charlie-munger-2017-01-06) or other newsletters (https://id.marketwatch.com/access/50eb2d087826a77e5d000001/latest/login_standalone.html?url=http%3A%2F%2Fwww.marketwatch.com%2Fuser%2Fnewsletter), and get the latest news, personal finance and investing advice.
-Philip van Doorn; 415-439-6400; AskNewswires@dowjones.com
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02-10-18 0904ETCopyright (c) 2018 Dow Jones & Company, Inc.