Answers to
Practical Questions
Know that Stock Market Bear Attacks Occur Frequently
Since 1900, a period of almost 120 years, there have been 32 Stock Market Bear attacks. Historically, these Bears attack about every 3.5 years, or put another way, there have typically been three Stock Bear Market attacks every 10 years. The last Stock Market Bear attack occurred in 2009, eight years ago, and if those strategists I mentioned above happen to be correct about the rosy prospects for 2018, it will prove to be the longest gap between Stock Market Bear attacks in the last 120 years!
“Stock market meltdowns are like natural disasters – they’re unpredictable and unavoidable.”
– Rob Carrick
Every investor must prepare for a Bear attack. If an investor has a 40-year investment horizon, (i.e., the number of years between an investor’s current age, and the year the investor “HOPES” to die – and everyone should have this number in their head), the investor really should EXPECT to survive about 11 Stock Market Bear attacks (40 years ÷ 3.5 years = 11).
An investor’s first Bear attack is always the most traumatic. The attacks that follow are a little easier to deal with.
The first step in surviving a Stock Market Bear attack is to simply know that they are NORMAL and to be EXPECTED. I don’t know where the market is going from here; I am not saying a Bear attack is imminent, but the one thing I am extremely confident about is that there will be a Stock Market Bear attack at some point. Tomorrow? Next week? Next month? Next year? In a few years? I don’t know, but to repeat: Goldilocks is approaching the longest gap between Bear attacks in 120 years.
“October: This is one of the peculiarly dangerous months to speculate in stocks. The others are July, January, September, April, November, May, March, June, December, August and February.”
– Mark Twain