The bear and bull statues outside the Frankfurt Stock Exchange. Picture: BLOOMBERG/ALEX KRAUS
Another reason could be that investors are becoming better at tuning out the market’s gyrations. With every sell-off, they gain confidence that the market recovers eventually, even from harrowing declines like the dot-com bust in 2000 or the 2008 financial crisis. That may also explain why, by all indications, most investors hung on to their stocks during the pandemic-induced sell-off in 2020.
It’s easy to underestimate the torment of an extended bear market if you’ve never encountered one. Neither millennials nor members of Generation Z were old enough to experience the dot-com crash, the most recent multiyear bear market. Reading about it isn’t the same as living it, but for the uninitiated, it’s worth reflecting on the anatomy of that downturn.