Jill On Money: The bear market is dead, long live the bull!

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Reactions will be mixed, but old wisdom still prevails

But like the churn of the ocean before a storm — and the subsequent tranquility after the worst is over, there is a good lesson for investors: Those who do not panic amid the clouds of confusion are often rewarded with sunnier skies.The longest bull market on record started in March 2009 after the Great Financial Crisis Bear Market mauled its way through the system. The GFC Bear lasted 517 days and caused a 56.8% drop in the S&P 500 index.

The combination of these trillions of dollars that flowed into the system truncated the COVID Bear, which lasted only 33 days , but the damage was intense with a 33.9% drop in the S&P 500 index.As 2022 started, it was obvious that the Federal Reserve was planning to increase interest rates in order to clamp down on inflation. Few anticipated that the central bank would conduct its most aggressive rate hike campaign since the early 1980’s.

And yet, stock index prices seemed to defy expectations, as many companies were able to make money, job creation continued and new innovation in the form of AI ignited animal spirits. The bear market ended on June 8, which marked the day that the S&P 500 index had climbed more than 20% from the January 2022 lows.

 

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