I received some information from Barry Arnold, the Chief Investment Officer for Global View Capital regarding bear markets that I think you will find interesting. Courtesy of First Trust, the below table shows all bear markets since World War II. 1) the average duration of the previous 12 bear markets lasted 367 days … this one has endured for 270 days and counting (278 days now thru the 10/12/22 closing low); 2) since 1946, the average price decline from the peak is -33.6% … the 2022 bear market has inflicted a -25.4% loss; and 3) the average price gain 12 months after the bear market trough is +40.8% … but we have no way of knowing at this point where that ultimate trough will plant its flag. So, the 2022 bear market so far is on the tamer side of things when compared to average post-WWII bear markets. Note where the chart shows the date the bear market began, the number of days it lasted, the percentage the market dropped from it’s high to the low, and what occurred the following 12 months after reaching the low. Obviously, there are no guarantees that past results are indicative of future performance. There is an undeniable trend that indicates it pays to be patient and wait out the down times.
There is no place to hide in this market. Even money in a bank is being held hostage by inflation. We do not know at this point where capitulation (finding the bottom) is. There will be bull runs inside bear markets. Until something changes, we can expect the market to remain soft and inflation to be stubbornly high. Going back over many years, the market has always recovered. I have no reason to believe now is any different. Putting more money to work is buying things on sale. Your gut tells you it’s crazy to invest now, while your head is telling you the opposite!!