Why the looming bear market will be different

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London (CNN Business)When a bear market arrives, it’s not pretty, especially for investors making short-term decisions. But it happens — and a recovery arrives eventually.

Quick refresher: A “bear market” refers to when stocks drop 20% or more from their recent peak. They’re a sign of extreme negative sentiment on Wall Street and are more severe than garden-variety sell-offs. Since World War II, the S&P 500 has experienced 17 bear markets or near bear markets, according to an analysis by LPL Financial’s Ryan Detrick. Number 18 is all but certain to arrive soon. The S&P 500 is down 18.7% from its high in early January, battered by concerns about inflation, interest rate hikes and the war in Ukraine. Most traders don’t expect it to begin staging a sustained comeback for some time. “The sour mood has been persistent,” Peter Boockvar, chief investment officer at Bleakley Advisory Group, wrote to clients earlier this week. Historically, when the S&P 500 has entered a bear market, the average drop was almost 30% and went on for nearly a year. Enter your email to receive CNN’s nightcap newsletter. close dialog

 

That period is painful, but it doesn’t last forever. And...

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Sarah J. Maas is the #1 New York Times and internationally bestselling author of the Throne of Glass, Court of Thorns and Roses, and Crescent City series. Her books have sold millions of copies and are published in thirty-seven languages.

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