Q. Everyone is saying the stock market is approaching its peaks and a bear market could start at anytime. How bad a bear market could be?
A. During the Halloween time, it's Okay to talk about something really spooky - such as the big drops the bear markets have experienced in the remote past and the not that remote recent.
The Great Crash
Let's start from the Great Crash - in late 1929, large cap stocks fell 44.4% in two months, then regained much of that loss in the ensuing months, then sank again.
When the dust settles, the market had lost 83.5%! If one entered into the market on Sept 6, 1929, he or she wouldn't break even until Dec 1944!
1937-1938
The market lost 51.5% in 1937-1938.
2000-2002
The S&P tumbled 47.4%!
2007-2009
Just 5 years later, the market would collapse another 55.3%! If one entered the stock market during this time, he or she wouldn't break even until Apr 2012!
Will the stock market enter into another bear market in 2015?
The truth is, nobody knows, but you can at least take some actions to prepare for such possibility.
A. During the Halloween time, it's Okay to talk about something really spooky - such as the big drops the bear markets have experienced in the remote past and the not that remote recent.
The Great Crash
Let's start from the Great Crash - in late 1929, large cap stocks fell 44.4% in two months, then regained much of that loss in the ensuing months, then sank again.
When the dust settles, the market had lost 83.5%! If one entered into the market on Sept 6, 1929, he or she wouldn't break even until Dec 1944!
1937-1938
The market lost 51.5% in 1937-1938.
2000-2002
The S&P tumbled 47.4%!
2007-2009
Just 5 years later, the market would collapse another 55.3%! If one entered the stock market during this time, he or she wouldn't break even until Apr 2012!
Will the stock market enter into another bear market in 2015?
The truth is, nobody knows, but you can at least take some actions to prepare for such possibility.
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