Wanting to get out when the market drops is an emotional decision, one that is difficult to go against – especially when it is not just the stock market that is dropping, but also the bond market.
Yet, as you calmly ponder the bear market and its 20%+ stock market correction, remember that
markets do go down, and they also go up.
These days, the stock market may feel like bungee jumping without a rope, but it is much more like a roller coaster with its ups and downs.
While past performance is not a guarantee of future results, we can see the resiliency of the US markets over time.
The S&P 500’s Performance since 2000
· From March 24, 2000, to Sept. 21, 2001, the S&P 500 dropped 36.77%.
· From Jan. 4, 2002, to Oct. 9, 2002, it dropped 33.75%.
· From Oct. 9, 2007, to Nov. 20, 2008, it dropped 51.93%.
· From Jan. 6, 2009, to March 9, 2009, it dropped 27.62%.
· From Feb. 19, 2020, to March 23, 2020, it dropped 33.92%
Despite all those losses, when you look at the S&P’s overall performance during that time frame – from March 24, 2000, to Dec. 31, 2021 – it was up 312%.
Will this time be different? Do we have reason to believe that it will? Well, history never repeats itself exactly, but in my opinion, it will rhyme.