We gradually found ourselves back in a defensive stretch (see Critical Point in November 2007), which was followed by a market decline of more than 50 %, which erased the entire
preceding bull market gain in the S&P 500 index, and wiped out the entire total return of the index — in excess of Treasury bill returns — all the way back to June 1995.
This instance may be different in the near term, but a century of evidence argues that the completion of the
market cycle will wipe out the majority of the
gains observed in the advancing portion to - date (even without valuations similar to the present, the average, run - of - the - mill bear
market decline has erased more than half of the
market gains from the
preceding bull market advance).