A change in the stock market will take time

The Dow Jones index has been down for three quarters in a row — and not since the financial crisis has that happened.

Just as in baseball, many investors may feel the need to take a seat after three strikes, but that would be exactly the wrong thing for the long-term investor to do.

The feelings of disenchantment and not being able to get a fair shake, however, have been prevalent all year and continue to alienate investors.

China — a red herring — came out of nowhere for many not familiar with macroeconomics.

The Fed sloppily slobbered over every microphone placed in front of it and poorly projected a policy of procrastination.

The carnage was massive, with many stocks now deep into correction territory.

The good news — and there is some — is that the mutual fund year ended on Sept. 30, and the relentless selling in that sector has now passed.

A real challenge for stocks will be to see if the market can generate its first quarterly gain since the Federal Reserve stopped quantitative easing, which, interestingly, ended last December — three quarters ago.

Quantitative easing, the massive bond-buying program, also buoyed stocks, despite a lengthy period of slack growth.

As an example of the speed of the correction in the US markets, biotech, the darling of the bull market, sold off 20 percent in eight days.

When panic strikes, it always pays to look at the fundamentals. The US economy, for all its flaws and failings, is no longer in need of QE or zero rates.

So despite this being one of the more ferocious and volatile corrections in years, stocks are now much cheaper than they were eight weeks ago.

As you sit back and watch the baseball playoffs get underway, keep an eye out for the stock market’s “Santa Claus” in October. Sometimes he has a funny way of showing up in a pinch to spread some cheer.