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A Bear Market Update

The current bear market is the 27th since 1928.  It began on 1/3/22 and, as of December 8th, is the 15th longest bear market in history. It was confirmed as a bear market on 6/13/22 when the S&P 500 closed more than 20% below its 1/3/2022 established previous high of 4796.56.

The question all of us have is, “When will it end?”

To be officially declared ended, the S&P 500 must close above its 4796.56 previously recorded high.

This is what we know about the length of this bear market:

  • It is the 15th longest since 1928.
  • As of 12/15, it has been 334 days since it began. It will become the 14th longest at 353 days.
  • The average bear market lasts 289 days.

This is what we know about its price decline:

  • It is 22nd of 26, with 26 being the least decline.
  • As of 12/8, the market is off its high by about 17%.  The recorded its low 10/13 down 24.10%

The average decline for bear markets is 35.62%.

Could the bear market be over now?  

Yes. Keep in mind it cannot officially be declared over until the S&P 500 reaches a new all-time high (or a close above 4796.56). Currently, the market has recovered about 9% from its low and is currently around 3959.

I have learned over the years that wealth is grown only through patience and staying the course.  Wealth, not income, is the key component to defining financial security. Income can change quickly based on your employment.  While wealth can change too, it is much more durable than a paycheck.

What's the magic formula?

If securing real financial security could be achieved without “pain”, I am sure we would all know about it.  We are bombarded by claims that insist “pain” can be avoided if only a magical formula was followed.  False claims by so many different sources often get in the way of achieving financial security. Spending money is easy (and fun), investing and saving is not.  Successful investing requires being able to endure the “pain” of declining markets. 

The Timeless Phrase

How many times have I heard people say, “I will wait to invest until ‘things’ get more stable or improve”? Looking back and considering how investments perform over the long term, it is difficult to understand why anyone would wait. Studies have shown that the market has many of its best days at the end of a Bear market. Waiting for a Bear market to end results in missing significant upside.

If you doubt there are rewards to investing long term, simply review the chart below of the S&P 500 over the past 30 years.

 Can you give one good reason why obsessing over the current market will prove any more helpful than it did over the past 30 years?  In those 30 years we have endured 9/11, the financial crisis and now pandemic related inflation.  If you STILL doubt why being patient is more rewarding and helpful to achieving your financial security, consider the past since 1928. 

Sincerely, 

Kevin T. Curran

Co-CEO & Chief Investment Officer