Not exact matches
At Franklin Templeton, we've been investing in global
markets for
more than 65 years, across
bull and bear markets alike.
However, although sharp corrections are somewhat rare (they have only occurred in nine years since 1962), they have happened
more often during
bull markets than during
bear markets,
and thus have often presented buying opportunities historically.
The Schwab Center for Financial Research looked at both
bull and bear markets in the S&P 500 going back to the late»60s
and found that the average
bull ran for
more than four years, delivering an average return of nearly 140 %.
For
more Morgan Stanley Research on spotting a shift in the
market, ask your Morgan Stanley representative or Financial Advisor for the full report «A Spotter's Guide to
Bull Corrections
and Bear Markets» (March 4, 2018).
Nobody should be surprised that after having totally missed the fourth longest
and fifth most powerful
bull market of the last 100 years, the
bears draped into professor Shiller's CAPE would decide to do a
more thorough inspection of the fabric that made them so comfortable
and confident during the past several years but which is making them feel totally naked now.
In mid-January, the S&P 500 Index (SPX) slipped back into correction territory, small - caps officially entered a
bear market,
and the number of self - proclaimed
bulls hit its lowest point in
more than a decade, per the American Association of Individual Investors (AAII) survey.
The chart below captures a fairly simple filter of instances when the
market lost 5 % or
more over a 2 - week period, from a
market peak in the prior 6 weeks (within 5 % of the prior 52 - week high) that was characterized by a Shiller P / E over 19,
more than 50 % advisory
bulls,
and fewer than 25 % advisory
bears.
However, after enormous bailouts of the largest financial institutions in the country, as well as the auto industry,
and even
more monetary ease than in 2003 (accompanied by TARP, the stimulus plan, QE,
and QE2); we started another cyclical
bull market within the secular
bear market.
The 1982 secular
bull market was preceded
and followed by secular
bear markets that featured lots of sharp rallies
and sell offs, but netted investors nothing after
more than a decade.
Specifically,
bear markets don't typically end in a crescendo of fear
and panic, but
more often on a feeling of «despair
and disillusionment,» while strong
bull markets tend to feature heavy trading volume.
I incorporated some principles of trend following with entries
and exits to control losses
and maximize gains inside a retirement account,
and help navigate
bear markets and bull markets more carefully.
The chart below captures a fairly simple filter of instances when the
market lost 5 % or
more over a 2 - week period, from a
market peak in the prior 6 weeks (within 5 % of the prior 52 - week high) that was characterized by a Shiller P / E over 19,
more than 50 % advisory
bulls,
and fewer than 25 % advisory
bears.
The approach
and structure of the DRS is specifically built to help investors stay the course through
bull and bear markets by recognizing that smaller shorter - term drawdowns are
more easily weathered by having protection in place for larger, steeper declines.
One can make
more profit during a
bull market, when the value of stock
markets is high,
and less profit during the season of the
bear market, when the value of stock
markets decline.
As a result, the active funds tended to outperform by a
more significant margin in
bear markets and by a relatively modest margin in
bull markets.
Closing prices are the most important price in the
market because they show the settlement between the
bulls and the
bears,
and because the New York trading session is the second biggest behind London in Forex trading volume, it's very important to see this closing settlement at the New York close instead of at some other
more arbitrary time.
Finally, opponents of
market timing may argue that no
market timer can be correct 100 % of the time,
and the lost opportunity caused by missing a
bull market or the significant losses of getting caught in a
bear market require much
more than 50 % of a
market timer's predictions to be correct in order to benefit from the strategy.
It's a good reminder that the average
bear market loss represents a run - of - the - mill
market retreat of about 32 %
and wipes out
more than half of the preceding
bull market advance.
But as someone who's been through
bull and bear markets, recessions
and expansions, you can explain to your young co-workers that the
more moves you make, the greater the chance you'll make mistakes.
While XLP
and SPHD are
more focused on limiting
bear -
market downside while providing some
bull -
market upside, the iShares 1 - 3 Year Treasury Bond ETF is a much purer crash - proof ETF.
If the manager is taking
more risk then they look great in
bull markets and very bad in
bear markets.
In a strong
bull market, if you knew it was a strong
bull market, you would want to take as much risk as you can, assuming you can escape the next
bear market which is usually faster
and more vicious.
The cost averaging principle allows investors to buy
more units in
bear markets and fewer units in
bull markets.
It shows clearly that the
bull markets have lasted much longer than
bear markets and added much
more value than
bear markets have subtracted.
People invest
more aggressively during
bull markets and more conservatively in
bears not because their appetite for risk has grown or shrunk, contends Davey, but because «their perception of risk has changed.»
The business media in particular likes to use terms like «
bulls», «
bears» since they need to make
market moves
and trends
more exciting than they really are.
Most financial professionals will encourage you to stay the course or even invest
more during corrections
and bear markets to reap the fruits of the
bull markets that will inevitably follow.
It will be hard to accept, if I directly conclude that quality small caps
and mid caps can offer
more safety, better dividend yield
and obviously better return than large cap stocks across any
market cycle (
bull and bear market).
Common sense would tell us that there will be
more overvalued individual stocks in a
bull market,
and conversely, there will be
more undervalued stocks in the
bear market.
Investors will likely tend to have also accumulated
more wealth after
bull markets and less wealth after
bear markets.
Yet, if we accept the notion that secular
bear markets include cyclical
bull markets within them,
and if we recognize the epic nature of the risk - off movement of capital, «secular» is a
more accurate descriptor (than «cyclical»).
And economies that are not subject to irrational bull markets and the depressing bear markets create more lasting weal
And economies that are not subject to irrational
bull markets and the depressing bear markets create more lasting weal
and the depressing
bear markets create
more lasting wealth.
He knows to give the
bull market most of the credit...
and he remembers that when the
bull turns to
bear,
and 95 % of stocks turn down, cash will be
more valuable than all his brainpower.
High - turnover strategies also tend to be
more volatile, outperforming in
bull markets and underperforming in
bear markets.
These are volatile funds
and tend to outperform the
markets in a
bull run but they fall
more than large cap funds when there is a
bear market.
While you might not necessarily get into specifics
and do a deep dive on investing, understanding how the economy
and stock
market works
and learning basic terms such as «
bull»
and «
bear market» will help your teen be
more educated when it comes time for them to invest.
In the article The psychology of
bear markets published in December 2009, during the brunt of the
bear market James Montier writes about that the mental barriers to effective decision - making in
bear markets are as many
and varied as those that plague rationality during
bull markets but that they
more pronounced as fear
and shock limits logical analysis.
Also everything I read so far about CC ETF's say that they are a lot less volatile in
bear markets (+ according to my stats, they return
more in
bull markets),
and CC strategies reduce risk, etc. etc. so I have a hard time understanding why it wouldn't be a good way to invest.