You can expect volatility in the coming months. Let’s talk about what a bear market means.
1. Bear markets are a prolonged period of falling prices, typically losing 20% + from the most recent high. The opposite of this is a bull market which gains 20% from the most recent bottom.
2. One is a natural successor to the other. Bull markets run out of steam. On the flip side, in the year following the last three bear markets in the U.S. the S&P 500 gained at least 32%. The S&P is an index of stocks that measure the performance of 500 large U.S. companies and is one of the most commonly followed benchmarks for the stock market.
3. On average, bear markets have happened about every 3.5 years.
4. Almost anything can cause a bear market, from geopolitical events to investor behavior. No matter what causes it, they are inevitable. This is how markets operate.
5. Every bear market has passed, on average lasting about 15 months.
Stay centered on your goals. Don’t make a change to your approach if your goals haven’t changed. If you get out too soon, you may miss a market upswing.
Don’t give into group think, it’s as impossible to know what others are doing in this moment as it is to know if the market is at it’s bottom today.
Stay in touch. We are here for you and would be happy to share more of our perspective, so be sure to reach out.
