Financial Planning Fridays #002: Special Episode: The Bear Market is Over

The bear market in stocks that began in June 2022 is now officially over.

The S&P 500 just closed 20% higher than the low it made on October 12, 2022, beginning a new bull market.

Now is a great time to review what happened and see what we can learn from this for next time.

First, as is often the case, the news media was almost constantly negative as the market rallied 20% over the past eight months. We heard endless talk about inflation, rising interest rates, a recession, more bank failures, and a debt ceiling crisis. At times it seemed that Financial Planning Fridays was the only place to get an optimistic point of view. Negative news attracts attention, and the media took advantage of this.

Second, once again, the negative news and volatile market caused many people to panic and abandon their long-term investment plans. U.S. investors have pulled about $270 Billion from stock ETFs and mutual funds since the bear market began in June 2022.

This chart shows the amount of money potentially lost on a $1 Million investment in the S&P 500 by succumbing to all of the negative news and selling during each month of this bear market up until last week. This is another example in a very long list that shows that it is impossible to time the market and it has cost these investors tens or even hundreds of thousands of dollars.

Finally, at Presilium, we are proud to say that we did not have any clients abandon their long-term plans and panic sell their stock investments during this recent downturn. Once again, the market has climbed a wall of worry and marched higher despite the negative news media. Our clients mean everything to us and we are thrilled to have successfully guided them through this difficult time. This experience only reinforces our belief in remaining focused on the long-term and ignoring short-term noise and especially the media.

Be on the lookout for our next Financial Planning Fridays episode. Subscribe to our Youtube Channel so you never miss an episode. Or contact us directly; schedule your 15-minute call with us today.