Stocks are getting crushed, and investors want to know when they will recover. The S&P 500 is down 20% so far as investors react to rising interest rates, inflation, and war in Ukraine. Since 2000, there have been five bear markets with an average decline of 36% and a duration of 192 days. When will this bear market end?
My Jeep is stuck at the dealership waiting for a new part. I’ve been waiting since May, and when I inquire about my car, they tell me it should be ready next week, and they have said next week for the past six weeks. In addition, I’ve been waiting for a new car, and due to supply chain issues, there is no official delivery date. Frustrating.
River rafting guides love to tell rafters that the next stop will be around the next bend, and if you’ve been rafting, you know rivers constantly bend, twist, and turn. The next bend could arrive in the next few minutes or hours, and no one knows, not even the guide.
When I was growing up, my mom’s standard answer was soon. When is dinner? Soon. When will we arrive? Soon. When can I open my presents? Soon. I was in the dark.
In short, no one knows what will happen in the future. The markets could recover next week, next month, or next year. I wish I had a better answer, but I don’t. I do know, however, that stocks ultimately recover. In the meantime, follow your plan, diversify your assets, invest often, and think long-term.
Rivers know this: there is no hurry. We shall get there someday. ~ A.A. Milne
July 6, 2022
Bill Parrott, CFP®, is the President and CEO of Parrott Wealth Management, located in Austin, Texas. Parrott Wealth Management is a fee-only, fiduciary, registered investment advisor firm.