I know you're already aware, but the stock market continues to trend lower.
If we are getting technical, stocks don't enter a "bear market" until prices are down at least 20% from their highs. And for most market watchers, this calculation is based on closing prices.
Frankly, this is all silly semantics about round numbers and rounding errors.
Any way you look at it, the stock market is down a lot.
We could debate how the present day is and isn't like history's bull and bear markets, but that's unlikely to end with a definitive conclusion.
Nevertheless, let's do a quick review of historical market performance.
Technically, we're in year three of a bull market that began on March 23, 2020.
Ryan Detrick, chief market strategist at LPL Financial, reviewed the history and found that three of the 11 bull markets since World War II ended in year three.
So from the perspective of duration, it wouldn't be too unusual for stocks to be in a full-blown bear market sometime before March 2023.
On the matter of duration, history's stock market corrections have had an average length of 133 days from market top to market bottom, according to data compiled by Detrick.
The current correction has run for 131 days as of Friday the 13th, which is pretty close to average, assuming the market inflects upward soon.
Trust me, I know, sell-offs are no fun.
But as investors, this is what we signed up for.Huge stock market sell-offs are normal. The S&P has historically seen an average annual max drawdown (i.e., the biggest intra-year sell-off) of 14%.
Some years see milder sell-offs, and other years see worse ones.
This all speaks to two conflicting realities investors must cope with: In the long run, things almost always work out for the better, but in the short run, anything and everything can go wrong.
This is what investing in the stock market is all about.If you're an investor who's willing to put in the time, conditions still appear to be favorable.
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