A Few Details About Stock Market Corrections/Crashes!


  1. They happen more than you think – pullbacks of 10% or more occurred 11our of the last 20 years

  2. Of those, 4 out of 20 years (20%) had pull backs of at least 30% during their yearly lows

  3. While over half of the last 20 years have had double digit pullbacks, only 4 of those pullbacks ended the year negative.

  4. Bear markets (decline of at least 20%) on average last about 17 months

  5. On average, if you buy at the top before a bear market, it takes 4.4 years or (1,100 trading days) for you to make your initial investment back.

Summary:

If you have a time horizon of 5+ years the likelihood you lose money is near zero and if you have a time horizon of 20+years your likelihood of losing money is 0%. Note this applies if investing in the broader market (i.e. S&P/Nasdaq/maybe a few blue chips).

DCA is king and can help shorten these timelines in your favor.

tl:dr be safe, DCA, ignore the charts, emotions/tensions are high right now, we could be at the bottom, could be nowhere near it, we won't know until 6-months after the bottom.


Comments

Leave a Reply

Your email address will not be published. Required fields are marked *