Rocky Balboa said: “You, me or nobody will be hit so hard
like life. But it’s not about how hard you hit. It’s about how hard you can get
hit and move forward. How much can you take and develop yourself? This is
how to win. ”
Investors are hit hard. The broad US stock market,
The S&P 500 Index saw a 30% decline in the bear market
over the course of 23 trading days.1 That’s about 130 days faster
than the typical bear market from 1900.2nd The massive
The 2019 winnings disappeared between Valentine’s Day and St. Patrick’s Day.3rd
Instinct is for sale. Expose the rest. However, we cannot stop thinking
about everything we’ve learned about the foolishness of trying to time the market. We
Summarize the famous DALBAR study and analysis that shows what happens when we do
Don’t miss the best days in the market (half of these days take place during a bear market4th)
and research shows that stocks have been positive since 1945
Returns over 99% of the time over a period of 15 years.5 We use a long term
historical perspective to adhere to the principles of sound investing, such as
Persistence and courage to prevent us from making emotional decisions
possibly bad times.
But let’s not comment this again if we don’t sell
in extreme market environments. I owe my friends, my family,
Colleagues and customers ask if it’s time to buy. The story of the broad
The US market teaches us that there has never been a “bad” time to buy the broad one
Market (the line for the broad market has increased over time), though there
were certainly “better” times to buy. First of all, let us acknowledge that none
of us can predict when the market will bottom out. The number of new COVID-19 cases
will likely have to peak before we get there. That is a question for the
Answer epidemiologists and answer a challenge for Americans and global citizens
Take social distance and / or isolation seriously. When that happens, I think
Investors are likely to wake up in an environment where stocks are relatively cheap
to their own history and ties and there can be massive impulses worldwide. We
Everyone might want to use that, but what if we’re too early? What if we
are only in the middle? Let’s consider history as a possible guide:
- We analyzed the peak-to-through periods for six prominent ones
Bear markets (the Great Depression of 1929, the crash of 1987, the Gulf War of 1991,
the technology crash of 2001 and the global financial crisis of 2008) and made one
hypothetical investment of $ 100,000 in the broad market represented by
S&P 500, right in the middle of each drawdown.
- For example, during the global financial crisis,
The market peaked on July 19, 2007 and bottomed 413 trading days later
March 9, 2009. Our hypothetical investment was made on day 207 in May 2008.
many of the worst days in the market in the fourth quarter of 2008 and the first quarter
2009. Our initial hypothetical investment of $ 100,000 had dropped to $ 55,450 from the US government
Time when the market bottomed out in the first quarter of 2009. Ouch! Ten years later, it was worth $ 205,000.
This is equivalent to a 7% return per year regardless of the initial loss.6
- Indeed, we across the six major bear markets
observed, investors lost between the midpoint and an average of 38%
the floor. An investor would have returned 10 years later, on average 110%
cumulatively from the center of the drawdown.7 Who among us
Wouldn’t you sign up now for a possible doubling of our money in 10 years?
The saying goes that time heals all wounds. History suggests
This time in the markets not only heals wounds, it also keeps us “forward” – even
when we’re early
1.Source: Bloomberg, as of March 18, 20
2.Source: FactSet Research Systems, Inc., as of December 3, 2019, represented by the S & P 500 Index.
3.Source: Bloomberg, as of March 18, 20, represented by the S & P 500 index.
4.Source: Bloomberg, as of December 31, 2019. Research based on the daily returns of the S&P 500 index. The often cited analysis by DALBAR, Inc. examined the average returns of investors. The analysis used the net monthly sales, redemptions and exchanges of mutual funds as a measure of investor behavior and found that by frequently entering and exiting markets to time their investments, investors often realized long-term returns that were below the Returns were on the asset classes in which they were invested.
5.Source: Bloomberg, as of December 31, 2019. Results are based on the monthly 15-year returns of the S&P 500 Index from 1945 to 2019.
6.Source: Bloomberg, as of December 31, 2019, represented by the S & P 500 Index.
7.Source: Bloomberg, as of December 31, 2019, represented by the S & P 500 Index.
500 is a stock
Market index that measures the stock performance of 500 large listed companies
on exchanges in the United States. It is not possible to invest
directly in an index. Past performance is no guarantee of future results. All
Investing involves risk, including the risk of loss.
The above opinions are
that of the authors March 20, 2020. These comments should
not to be understood as recommendations, but as an illustration of more general topics.
Forward-looking statements are not guarantees of future results. they include
Risks, uncertainties and assumptions; There can be no assurance that it will
The results will not differ significantly from expectations.
This is not a recommendation for an investment
Strategy or product for a particular investor. Investors should a
Financial advisor / financial advisor before making investment decisions.
Invesco does not offer tax advice. The tax information contained herein is
general and is not inherently exhaustive. Federal and state tax laws are complex
and constantly changing. Investors should always consult their own legal or tax regulations
Specialist for information about your individual situation. The
The opinions expressed are those of the authors and are based on the current market
Conditions and are subject to change without notice. These opinions may differ
from those of other Invesco investment professionals.
Note: We are not the author of this content. For the Authentic and complete version,
Check its Original Source