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Arista Market Update - We've Officially Entered a Bear Market

In this Arista Market Update, Paul L. Moffat discusses the bear market and provides some important facts to help put things into perspective.

Full Transcript:

Hello, welcome to Arista’s Market Update. Hope you’re well and staying healthy and strong through this COVID-19 pandemic.

Many years ago Victor Hugo had been advanced some money to write a masterpiece. He delayed, he delayed, and he delayed, and finally they locked him in a room, and said “You can come out when the manuscript is done.” Well, after 90 days he came out of the room and that manuscript was The Hunchback of Notre-Dame.

Painful, hard, lots of discipline, strategy and structure, it produced one of the great novels of all time that Victor Huge wrote.

We’ve officially entered a bear market. From peak to trough, we’ve seen a 20% decline. So let me share with you some facts to help us understand the big picture.

Fact #1 – bear markets are normal. There have been 25 bear markets in the S&P 500 since 1928, and there have also been 26 bull markets. Potentially if we have reached bottom, the bull market has now started.

Number 2 – bear markets tend to be short-lived. The average bear market 299 days or 10 months. The average bull market 2.7 years.

 Fact 3 – Half of the S&P 500 index’s strongest days in the last 20 years occurred during a bear market. You have to stay invested and continually participating in the market to reach your potential.

 Fact #4 – a bear market doesn’t necessarily indicate an economic recession. There’ve been 25 bull markets since 1929, but only 14 recessions occurred during that time.

 Fact #5 – assuming a 50 year investment time horizon, you can expect to live through 14 different bear markets. How many bear markets have you experienced?

 Fact #6 – bear markets can be painful, but overall markets are positive a majority of the time. Bear markets account for 20% of those years, and the bull markets then account for the other 80% of those years.

We’re here to assist and guide you during this COVID-19 pandemic. Please give us a call. We look forward to talking to you soon.