Many individuals are concerned when they are stricken by a “Bear Market Blooming” media headline. This can lead to feelings of fear or even worry. With these emotions piling up, some feel they need to prepare for this so-called bear market, when in reality they are reacting.
But what if these bear markets weren’t that bad? What if they aren’t as uncommon as we have heard? What if you realized we have seen almost all types of reasons for a bear in our history and have always come out on top? Well, they aren’t uncommon. Every crisis we have had thrown at us, we have been able to survive and thrive, and they aren’t that bad. This may seem like an optimistic statement, but the facts are facts - and facts don’t lie.
Below are the facts- as history has provided about Bear Markets:
EVERY BEAR MARKET 1946-2020
AVERAGE -30% 13 MONTHS
*Nick Murray – Bear Markets History 2021
Hopefully, the chart reveals their utter commonness. There have been sixteen bear markets since the end of WW2. This will average out to about one every five years with an average drop off about -30% - and they do last about thirteen months.
As you can see, during the first bear market in May of 1946, the S&P peaked at 19.3. As I write these words today, towards the end of May 2022, the S&P 500 is at 4,158.
What can be learned from this chart is simple.
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*Nick Murray – Bear Markets History 2021.
Markets defined as S&P 500 Index.
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