Hurricanes Suck! Will Harvey Lead To A Stock Market Crash?

Hurricanes suck!

They really do.  People are killed.  Homes and lives are destroyed.  We hope and pray for everyone in Texas and the Houston area.  

Perhaps now the climate change issues will get the attention they need.

That said...  What does history tell us about a devastating hurricane on the stock market?  So I ran a quick chart from August of 2005 on the SP500 at the time of Katrina.  You can note three things. The bullish technical set up in 2005 is similar to today.  Then, the market pulled back about 3% in the next months following Katrina.  But, the market moved on over the next couple of years to post additional 27% gains.

Houston is a larger community with perhaps a bigger economic impact than New Orleans.   So perhaps a larger near term correction is going to happen.  If and when that happens we will decide if a more risk off approach is in order.

If history is any guide, there is at least the possibility the market will continue to move ahead in the coming months and years.  

We are not forecasting this.  We do not forecast at The Vig Company.  We trend follow.  And when the trends change we will react.  Trends for now remain upward and intact.

Our heart goes out to everyone hurt by Harvey.

Hurricanes suck!

Chris Vig is president of The Vig Company and is an investor, artist, author, business consultant and former CEO living in Monona, WI. This article is for entertainment purposes only.  Do you own diligence when investing your hard earned cash.