Returns From the Bottom of Bear Markets

We are now in the 13th worse bear market since the late-1920s with losses just shy of 30%.

It would take another 15% drop from here to get to a 40% loss.

It would take another 30% drop from here to get to a 50% loss.

I don’t know if this is going to happen and neither does anyone else but it’s certainly possible. It’s happened before and it will happen again, even if it’s not this time.

Looking past this pandemic almost doesn’t feel right because the worst is still yet to come.

I don’t know what’s yet to come in the markets because investors are recalibrating their thoughts about the future on the fly.

It’s anyone’s guess what comes next.

But eventually we will get past this. We ALWAYS do. If you don’t believe this, what’s the point of investing in the first place?

Stocks will bottom and there will be a massive, face-ripping rally.

I don’t know when but it will happen.

Here are the other 12 bear markets that are worse than the current version along with their ensuing one, three, and five year forward returns:

The bad news is I have no idea when stocks will bottom. Maybe it was today? Maybe it will happen in a week…or a year. Who knows?

But it’s going to come at some point.

Will you invest at the absolute bottom? Not unless you’re ridiculously lucky. But the point remains that the bigger the losses the higher the expected returns.

This feels like an awful time to buy stocks.

That’s usually a good sign (although things could always get even more awful from here).

This weekend I’ll share how I’m personally investing through this market crash. Stay tuned.

This content, which contains security-related opinions and/or information, is provided for informational purposes only and should not be relied upon in any manner as professional advice, or an endorsement of any practices, products or services. There can be no guarantees or assurances that the views expressed here will be applicable for any particular facts or circumstances, and should not be relied upon in any manner. You should consult your own advisers as to legal, business, tax, and other related matters concerning any investment.

The commentary in this “post” (including any related blog, podcasts, videos, and social media) reflects the personal opinions, viewpoints, and analyses of the Ritholtz Wealth Management employees providing such comments, and should not be regarded the views of Ritholtz Wealth Management LLC. or its respective affiliates or as a description of advisory services provided by Ritholtz Wealth Management or performance returns of any Ritholtz Wealth Management Investments client.

References to any securities or digital assets, or performance data, are for illustrative purposes only and do not constitute an investment recommendation or offer to provide investment advisory services. Charts and graphs provided within are for informational purposes solely and should not be relied upon when making any investment decision. Past performance is not indicative of future results. The content speaks only as of the date indicated. Any projections, estimates, forecasts, targets, prospects, and/or opinions expressed in these materials are subject to change without notice and may differ or be contrary to opinions expressed by others.

The Compound Media, Inc., an affiliate of Ritholtz Wealth Management, receives payment from various entities for advertisements in affiliated podcasts, blogs and emails. Inclusion of such advertisements does not constitute or imply endorsement, sponsorship or recommendation thereof, or any affiliation therewith, by the Content Creator or by Ritholtz Wealth Management or any of its employees. Investments in securities involve the risk of loss. For additional advertisement disclaimers see here: https://www.ritholtzwealth.com/advertising-disclaimers

Please see disclosures here.