Important Note

You are now leaving the Strong Valley Wealth & Pension, LLC ("Strong Valley") website. By clicking on the "Schwab Alliance Access" link below you will be entering the Charles Schwab & Co., Inc. (“Schwab”) Website. Schwab is a registered broker-dealer, and is not affiliated with Strong Valley or any advisor(s) whose name(s) appears on this Website. Strong Valley is/are independently owned and operated. Schwab neither endorses nor recommends Strong Valley. Regardless of any referral or recommendation, Schwab does not endorse or recommend the investment strategy of any advisor. Schwab has agreements with Strong Valley under which Schwab provides Strong Valley with services related to your account. Schwab does not review the Strong Valley website(s), and makes no representation regarding the content of the Website(s). The information contained in the Strong Valley website should not be considered to be either a recommendation by Schwab or a solicitation of any offer to purchase or sell any securities.

Article

The NASDAQ Bear Woke Up Angry

The NASDAQ Bear Woke Up Angry

Bear markets happen. Bull markets happen. And do you think you can figure out when the market is turning – either up or down and trade accordingly? Well, before you think that you should get out of this market now and wait this bear out, here’s some things you might consider.

March 29, 2022
The NASDAQ Bear Woke Up Angry
Important Disclosure: Content on our website and in our newsletters is for informational purposes only. The information provided may (or may not) directly apply to your situation. We recommend that readers work directly with a professional advisor when making decisions in the context of their specific situation.

Bear markets happen. Bull markets happen. Just stick to your financial plan, and stay calm and disciplined. When the market sours or slumps, don’t believe talk that this time it is different. It is not.

History shows this is true. Here is a simple chart of the performance of NASDAQ for the 20-years ending March 7, 2022 (NASDAQ officially entered bear market territory on this day). This covers the decline and recovery from the last U.S. recession as well as the last bear market (the COVID-bear).

NASDAQ Over 20-Years

What does this chart show? When markets decline, they do so rapidly and painfully. The subsequent recovery is slow and uneven.

But it does inevitably happen. If you take the longer 20-year view of this chart, it’s clear that markets grow past previous highs after a dip.

Bears & Bulls – By the Numbers

Although the S&P 500 is not yet in a bear market, since it is “only” off 12% YTD and a bear market is defined as being off at least 20%, let’s examine historical bear markets as measured by the S&P 500.

There have been 26 bear markets and 27 bull markets in the S&P 500 Index since 1928. In addition:

  • Stocks lose 36% on average in a bear market.
  • Stocks gain 114% on average in a bull market. 
  • The average length of a bear market is 289 days (9.6 months)
  • The average length of a bull market is 991 days (2.7 years)
  • Since 1928, we have seen 20.6 years of bear markets – stocks have risen the other 73.4 years (that’s 78% of the time)

 

You Won’t Get the Timing Right

Think you can figure out when the market is turning – either up or down and trade accordingly? Well, before you think that you should get out of the market now and wait this bear out, consider this:

  • Half of the S&P 500 Index’s strongest days in the last 20 years occurred during a bear market. 
  • 34% of the market’s best days took place in the first two months of a bull market – before it was clear a bull market had begun.

In other words, the best way to weather a downturn could be to stay invested since it’s difficult to time the market’s recovery.

Stick to Your Plan

There are no investment strategies that give you the market’s ups and help you avoid the downs, save for luck.  Fear and greed are irrational emotions that easily lead to bankruptcy if they influence your investment decisions.

Of course, it is hard to stay patient and hold when Wall Street analysts, investment gurus and financial TV pundits spout endless gloom and doom at the troughs and exuberant optimism at market peaks. Short-term thinking like this only guides you to do the wrong things at the wrong time.

This is why it helps to work with an advisor – someone to cool your head when irrational exuberance strikes, and convince you to stick to your plan in the face of uncertainty.

Although it can be difficult to watch your portfolio dip with the market, it’s important to keep in mind that downturns have always been a temporary part of the process.

No matter what the markets are doing, assure yourself that this time is not different.

Other content you may like

  • Does Your Business Need An Internal Audit?

    June 17, 2025
    Discover the role and benefits of internal audits, as well as the many different types. They may help you assess whether your business processes are efficient and compliant. They can also uncover insights into improving organizational health for long-term success.
    Read this Article

  • Monitoring & Managing Business Credit Reports

    April 21, 2025
    It’s a good practice to review personal credit reports from the major credit bureaus, but have you considered monitoring them for your business? This article walks through why it’s important for business owners and partners to pursue a good business credit rating.
    Read this Article

  • Podcast Highlight - The Pain of Home Prices

    March 14, 2024
    The Strong Valley Team follows up their previous highlight on Fed Funds Cuts and inflation with how home prices have been affected, along with the inverted yield curve that is showing up.
    Read this Article
  • Hurricane Ida and Homeowner's Policy

    Hurricane Ida Reminds Us to Ask if it's Covered

    September 8, 2021
    When was the last time you actually read your homeowner’s policy? Standard coverage may not cover what you assume it would. You might consider options to add to your policy, such as endorsements and riders. This article gives three nuggets to keep in mind about homeowner insurance.
    Read this Article
    • The link you have selected is located on another server. The linked site contains information that has been created, published, maintained, or otherwise posted by institutions or organizations independent of this organization. We do not endorse, approve, certify, or control any linked websites, their sponsors, or any of their policies, activities, products, or services. We do not assume responsibility for the accuracy, completeness, or timeliness of the information contained therein. Visitors to any linked websites should not use or rely on the information contained therein until they have consulted with an independent financial professional. Please click “Continue to Link” to leave this website and proceed to the selected site.
    No, stay on StrongValley.comContinue to link
    phone-handset