Where do stocks go from here? Using the history of bear markets as a guide I pieced together a road map of what to be looking for.
After evaluating bear markets I came up in two categories one of which I term “garden variety” and I separate those from what I call “mega meltdowns”.
There were only three mega meltdowns in the past 100 years. The Great Depression era, the .com tech bubble of 2000, and the 2008 financial/housing crisis leading to the Great Recession. Those lasted several years and declined much more than a garden variety.
Garden variety bears on average take roughly a year to find a bottom and a year to recover the losses. If the current bear market is garden variety, then based on those averages (we are ~5 months into it) then we would be looking to bottom sometime at the end of the year or beginning of next with a full recovery around the end of next year.
Past performance is no guarantee of future results. Diversification does not guarantee a profit or protect against a loss.