Meta's largest drop

Yesterday Paul wrote about the Magnificent 7 stocks and how well they have served us. A successful story often sounds easy and obvious in hindsight. But in reality it has been far from plain sailing.

The team at Ritholtz Wealth put this image together which shows the biggest drawdowns for each stock in 2022 (blue) and so far this year (red).

Do you remember Meta crashing 74% in 2022? Stocks were in the doldrums because of high inflation and increasing interest rates. At that time, Meta was ploughing many billions into creating the Metaverse, which the market did not like. Nvidia collapsed 63% that year and Amazon was down 52%. Tesla is in a league of its own when it comes to drawdowns.

This year has also required strong resolve. Again, as Paul mentioned yesterday, it is not just about what stocks to own, it's vital to have the composure to stay the course when times get tough.