Investment News You Maybe Missed (2022 Bear Market)

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For over two years, the markets have been teasing a full recovery from the S&P 500 Price Index‘s eleventh bear market. On Thursday, January 11, the index had an intraday recovery and I wrote:

Did the 2022 bear market end on October 12, 2022? Probably, but we’ll have to check back tomorrow to see if there is a new peak close. If not, we’ll need to check the trading day after and after until we see a new peak close and can definitively call it.

Alternatively, you can just take Jack Bogle’s advice and don’t peek.

Hopefully, you didn’t bother looking, and I can be the first to tell you that the S&P 500 Price Index fully recovered from its eleventh bear market on Friday, January 19, 2024 at 4,839.81.

This new close was 0.90% up from the prior peak close of 4,796.56 on January 3, 2022 and 35.30% up from the bear market’s October 12, 2022 relative bottom of 3,577.03.

This means that the Bear Market ended and the current Bull Market started over 15 months ago. Those who flat-lined to cash or who waited to invest their cash until the markets looked better have missed out on its returns.

During each bear market, we are pleased to have many clients call asking for tax planning opportunities, like tax-loss harvesting or Roth conversions. We also field many calls from clients who have more cash they want invested while the markets are at relative lows.

In addition to these encouraging calls, we also receive phone calls from anxious or worried clients who are tempted to sell to cash. There are many ways that investment advisors earn their fee. One way is preventing you from making a big investing mistake.

When you have a long-term plan and perspective, you can stay invested and write a timeless article called “We Are Not Afraid. (A Reply to Recent Headlines).”

At 282 days from peak to relative bottom and 464 days from relative bottom to new high, this bear market was shorter than the long-term historical average, taking only about 60% of the average time to reach relative bottom and 30% of the average time to fully recover from there.

The market trends upward. It has bear markets, recessions, and crashes along the way, but it still trends upward. It crosses its new highs more than once heading both directions, but it still trends upward. The longer the time period you look at, the less drops there seem to be. In the long-run, these dramatic dips are but V’s in the mountain chart. Stay the course. Rebalance. Don’t peek. You will be okay.

Photo by Anand Thakur on Unsplash. Image has been cropped.

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Chief Operating Officer, CFP®, APMA®

Megan Russell has worked with Marotta Wealth Management most of her life. She loves to find ways to make the complexities of financial planning accessible to everyone. She is the author of over 800 financial articles and is known for her expertise on tax planning.