It’s been about two years since we’ve “endured” a bear market so it’s probably a good time for a refresher on markets:
Bear markets are normal.
They can be painful.
The reasons are always different but the emotions are the same.
No one knows how deep they will be.
No one knows how long they will last.
They do come to an end eventually.
Below is a chart showing all of the bear markets since 1950. It shows when the bear market started and ended, the depth of the drawdown, and how many days to recover (breakeven). Pretty interesting isn’t it?
How long our current market conditions persist probably depends on how long inflation stays elevated, how forceful the Fed is with raising interest rates and if those two factors combine to actually put us into a recession.
Things could surely get worse before they get better or this could all end with just 1 sentence from Jerome Powell.
The market bottom will look obvious in hindsight but, as always, predicting these things in real-time is almost impossible.
all the best… Mark