Hi there,

I’ve received some questions recently regarding the volatility of the market – with foreboding headlines spurring a bit of concern among investors. Though it may not seem like it, “bear markets” (those with 20%+ drops in index prices) are actually quite normal. 

I encourage you to take a look at this insightful article that shares some things you should know about bear markets. My key takeaways – and additions – are as follows:

• As I mentioned, bear markets are normal. It’s important to note that since 1945, there have been 14 bear markets in the S&P 500 Index. However, during bull markets, stocks have more than made up for short-term depreciation with an average increase of 114%.
• Even in a recession, the market tends to be positive 91% of the time in the 12 months following the economic downturn.

• You will likely experience 5-6 bear markets over the course of a 30-year investment period, or for younger investors, 9-10 bear markets over a 50-year investment period. Watching your portfolio dip with the market can be difficult, but overall, markets are positive the majority of the time. Bear markets have comprised only 20.6 of the last 92 years of market history – meaning that stocks have been on the rise 78% of the time.
• Bear markets have historically been some of the most advantageous and impactful times to add resources to your portfolio.

History gives us good reason to be optimistic about the long-term performance of a well diversified portfolio, despite it being impossible to predict exactly how stocks may perform in the short term. As an investor, it’s important to allocate your portfolio in such a way as to have reasonable expectations regarding short-term volatility. Doing so can help you maintain a high level of confidence in reaching and maintaining your goals. 

At Certus Wealth Management, I am here to help you build and maintain an investment strategy designed specifically for your personal situation.

If you have any questions, please don’t hesitate to reach out.

Thanks,

Financial Advice is offered through Certus Wealth Management LLC, a Registered Investment Adviser. 
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