Bear Market – Did You Miss It?
Week three of social distancing work has commenced. I’ve learned a key thing during this time—I can’t grow facial hair for bupkis.
I mean, it’s bad. Really bad.
I look like a high school kid who’s undergoing a bad experiment! That said, I may not have this chance again for a while, so I am pushing forward a little longer to see how it develops. (Although, I did totally give up on the mustache.)
Alright… to the topic at hand. Did you miss it?
It happened probably without you realizing it. You may have blinked and not even realized it happened. The talking heads didn’t report it as front-page news.
What am I referring to? The end of the shortest bear market of all time, that’s what. We all heard about the quickest bear market ever (meaning a 20% drop from the peak), which just transpired and took a mere 20 days to accomplish. It was all over the news, wreaking havoc for us all.
What the news outlets didn’t report was the opposite, because bad news sells best. The bear market officially came to an end in 3 days! That’s right—in three consecutive days, the Dow Jones moved an incredible 21% (20% incline makes a bull market) to form the latest bull market.
Now, I’m certainly not so naïve to think that tough times are over. And, my comments certainly don’t suggest tomorrow begins another 11-year bull market, however, the moral of this story is a few-fold.
First, markets move quickly.
Like, really quickly. They shot down at historic rates and then shot back up. Volatility is everywhere and will likely persist for the short term.
Ferris Bueller once said, “Life moves pretty fast. If you don’t stop to look around once in a while, you could miss it.”
Andrew Rosen says, “The stock market moves pretty fast. If you stop investing in it, you’ll almost certainly miss out.”
Second is you got to ride the wave.
The only way to assure you don’t miss out on the long-term benefits of the stock market is to ride it out. I know it’s hard, but it’s true. I’ve been at this for a long time and if you want the good that comes with an eleven-year bull market, you have to take the bad.
In the words of Jeff Spicoli, “All I need are some tasty waves, a cool buzz, and I’m fine.”
In the words of Andrew Rosen, “Ride the stock market waves, have some good wine, and you’ll be fine.”
Finally, guessing right is virtually impossible.
Did you guess that the markets would shoot down that quickly? I know I didn’t. Did you also guess that the markets would shoot back up in a matter of three days? (Not to mention how tough it is to even mechanically shift in and out of the markets that quickly.) Can you really look yourself in the mirror and say—I got it right, twice? If so, I got a job waiting for you! The reality is, it’s so counterintuitive. During great times and market all-time highs, to say a bear market is happening tomorrow is tough enough. Then, to turn around during terrible times and say that great times are ahead is nearly impossible.
In the words of Warren Buffett, “Success in investing doesn’t correlate with IQ… what you need is the temperament to control the urges that get other people in trouble in investing.”
In the words of Andrew Rosen, “Uh, yeah, what that guy said.”
No one knows when the markets will bottom out or hit a peak. There’re likely choppier seas ahead, as well. Hopefully, the quotes of these ‘great’ men (?) will help remind you there’s only one strategy to really winning the stock market investment game (or at least that I am aware of). It’s to make sure you have the right blend of assets in your portfolio and staying the course; working with a professional can be invaluable to your success.
Stay safe everyone and tune in for week four to see what roller coaster I’ll be experiencing then!