This 2020 COVID Bear Market was 33 days from peak to relative bottom, but for many investors it tested their nerve and their risk tolerance.
On February 19, 2020, the S&P 500 reached a new peak closing at 3,386.15. Six trading days later the S&P 500 closed down -12.03% from its prior peak as a correction, and by Thursday, March 12, the S&P 500 closed down -26.74%, entering the definition of a Bear Market. On Monday, March 23, the S&P 500 reached a relative bottom at 2,237.40, down -33.92% from its prior peak. Then, it started a modest recovery.
As of the end of May on Friday the 29th, the S&P 500 closed at 3,044.31, up 36.06% from the relative bottom, down -10.10% from the last peak closing, and 70.24% of the way recovered.
On Tuesday, June 9, 2020, David John Marotta appeared on Radio 1070 WINA’s Schilling Show with Rob Schilling to talk about the markets.
- [0:00] Is the stock market disconnected from the stock market?
- Media narrative is disconnected from the forward looking stock market. There probably won’t be a second bottom.
- Article: Can the Misery Index Predict a Second Drop?
- [5:22] Should we be concerned that we are in the middle of an election cycle?
- There isn’t enough statistics for election cycles for them to be any predictor. The markets prefer congressional deadlock.
- Article: Should I Change My Strategy During the Presidential Election Cycle?
- [8:10] Is gold a good investment right now?
- Gold may be near a seven year high but that is because gold has had losses for eight years.
- Article: Did Gold Do Better Than The Markets? (2020)
- Young people aren’t buying gold, they are buying Bitcoin. But Bitcoin is an even less stable source of value.
- Article: Bitcoin, Tulips, Beanie Babies, and Speculation
- [11:22] What happened to energy? Energy hasn’t been a good investment since 2015.
- Article: Energy Stocks Have Been Disappointing Recently (April 2020)
- [12:49] What will be the best investment in the post corona virus world? Cleaning product companies, home improvement companies, real estate in the suburbs should all continue doing well.
- [14:43] What will happen with inflation? Stocks are a good hedge for inflation. Keeping just enough in cash and bonds to cover the next 5-6 years of spending. Food prices are up on account of the disruption in delivery. Home gardens have become more important. Regulations have gotten in the way of coping with the virus.
Photo by Fabe collage on Unsplash. We missed posting this article in a timely manner and back-posted it in May 2022.