Opportunities Don't Come Often
For global stock markets (using data since 1970), the first bear market on record was in 1974. Markets then chugged along nicely for the next 25 years before the dotcom collapse (affecting the over-priced tech sector) and then followed by the Global Financial Crisis in 2008. It has been 14 years since the last significant market sell-off and now we are here again!
We are always excited about bear markets because
They rarely happen in a diversified global portfolio (which doesn’t hold true if you invest in single countries or just hold a handful of stocks).
It is thus a rare opportunity to buy great companies at lower prices.
History suggests higher expected future returns coming out of a bear market.
You can see from historical returns in the chart above that the green (positive years) far outweighs the red (negative years). Despite the volatility and risk, you would have made a positive return more than 70% of the time. If investors expect to lose money, and if markets on average were flat over the long term and had equal numbers of positive and negative years, then nobody would want to invest.
A bank deposit could be a better bet.
If you have questions such as:
My investments have suffered and I am not sure what to do.
How do I capture the opportunity in the market right now? What should I buy?
Will markets always recover? Or is this time different?
Click here to schedule a 30-minute exploratory chat to address your questions and see how we can be of value in your financial journey.