The Bear Market…

This may be a better name for what we experience during market declines. Not just “bear” in the Wall Street sense — but “bare,” as in the bare cupboard of encouraging data.

Bear markets end before there’s any clearly positive information to act on. The information landscape is often filled with bad news and uncertain hopes: the war in Ukraine will end, the Fed will pause rate hikes, inflation will ease. But the market usually starts climbing before any of these positive shifts are confirmed — and can rally significantly before the headlines reflect improvement.

That’s why the best approach is to have a portfolio positioned to ride out the downturn and be ready for the next bull market.
There is, in fact, some encouraging data to consider:

• The average bear market lasts about 11 months. This one began 10 months ago.
• After bear markets, the following bull markets don’t just recover to previous highs — they typically double from there.
• Corporate share buybacks are on track to hit an all-time high this year. That’s especially notable because buybacks tend to peak during strong earnings periods, not downturns. It suggests corporate leaders are confident about future
  performance.

Right now, it’s not more data we need — it’s patience.

Katz Family Financial