However, it is true that when the market does have big down moves (
like during bear markets), they generally occur during the summer or fall.
Not exact matches
During relatively mild equity
bear markets,
like the one from 1980 through 1982, bonds rallied strongly.
Remarks: Due to their conceptual scope — and if not explicitly stated otherwise — , all models / setups / strategies do not account for slippage, fees and transaction costs, do not account for return on cash and / or interest on margin, do not use position sizing (e.g. Kelly, optimal f)-- they're always «all in «-- , do not use leverage (e.g. leveraged ETFs), do not utilize any kind of abnormal
market filter (e.g.
during market phases with extremely elevated volatility), do not use intraday buy / sell stops (end - of - day prices only), and models / setups / strategies are not «adaptive «(do not adjust to the ongoing changes in
market conditions
like bull and
bear markets).
That said, several previous periods of increasing rates happened
during bear markets,
like 1974, making alternatives to bonds tough to find.
While most stocks are punished
during bear markets, the real damage is often concentrated in certain groups,
like Technology stocks in 2002 and the Nifty Fifty stocks in 1974.
So while
bear -
market talk will inevitably escalate
during stock sell - offs
like we've seen so far this year, that doesn't mean the current bull
market is necessarily ready to give way to a
bear.
Owners of that fund (
like I was and remain) were disappointed then when
during the next
bear market from November 2007 to February 2009, DODBX performed miserably.
Like major asset classes, international equity factors» returns tend to be more correlated
during recessions and
bear stock
markets.
The potential for capital gains
during bull
market cycles is astounding however keep in mind that those capital gains can turn into capital losses
during bear market cycles
like we saw
during the 2007 - 2008 financial crisis.
Even
during this year's
bear market, Cabot Top Ten Report has found winners in stocks
like Cleveland - Cliffs, which doubled in four months, Continental Resources, which rose 160 % from its recommendation its peak, and Walter Industries, which moved from 42 in January to 112 in early July.
During relatively mild equity
bear markets,
like the one from 1980 through 1982, bonds rallied strongly.
Sometimes, for example, the
market seems
like it may be on its way to a
bear (as was the case
during the setbacks of 16 % in 2010, 19 % in 2011 and 12 % last August) but then recovers.
Leveraged ETFs
like SSO can lose 90 % + of their value
during bear markets.
Because there are multiple people
like Randy who have a relatively large position in the Bitcoin
market, when these people decrease their position in Bitcoin to an amount that they are comfortable owning
during a
bear period (and that number may be zero) their collective ask offers are capable of creating a sell - wall that drives down the price of Bitcoin.