FIVE TIPS TO NAVIGATE A BEAR MARKET

Summary

• Investors should remember long-term goals during market volatility, as missing the S&P 500's best 30 trading days over the past 20 years would result in almost flat cumulative returns.
• A bear market is defined as a decline of more than 20% from a recent peak, with 14 such events occurring since 1932.
• The average cumulative loss during bear markets since 1932 has been -35.1%, while the average bull market return has been 177.6%.
• Bull markets have historically lasted an average of 4.9 years, whereas bear markets have lasted an average of 1.5 years.
• Dollar-cost averaging involves investing a fixed amount regularly to potentially purchase more shares at lower prices.
• Missing the 10 best trading days over the past 20 years would have reduced annualized returns by 4.2%.
• Asset allocation is a critical decision, and bear markets may offer opportunities to add exposure to asset classes at reasonable valuations.
• Investors experiencing anxiety about short-term portfolio changes may benefit from turning off the TV and consulting a financial advisor.
• The S&P 500 experienced a decline of -25.4% from a local peak to trough in one instance and -33.9% in another instance.
• Data sources include Stifel Investment Strategy via Bloomberg as of April 30, 2024.