This Pullback is a Gift. Here’s How I’m Investing.

Key Takeaways

• Use data-driven tools like the Fear & Greed Index rather than emotions to guide investment decisions during market volatility.
• Midterm election years historically produce market drops followed by strong recoveries—an average 15.1% gain one year later, with a 75-year unbroken streak.
• Three forces are dragging AI stocks lower: expensive money (rising interest rates), surging AI spending that may not pay off soon, and AI itself cannibalizing other businesses.
• Bear markets last about 11 months on average and drop ~32%, while bull markets last 4.4 years and return 153%—making downturns prime buying opportunities.
• Follow a systematic plan: zoom out, keep cash on the side, dollar-cost average in and out, check the big data first, and always remember why you own each stock.

Table of Contents

1. Data-Driven Investing
2. Midterm Election Data
3. Three Forces Behind AI Sell-Off
4. Five Things I'm Doing