Who am I kidding?
I can’t go an entire month without publishing anything here at Get Rich Slowly. I need to write. And judging from the feedback regarding
Instead of taking all of September off from publishing, I’ll instead vow that for the next four weeks, I won’t tackle any major articles. If there’s something that I want to share and that thing can be shared in 20-30 minutes, I’ll do it. This plan will serve the same objective — freeing my find to focus on the other tasks that need to get done around here — while also giving me an outlet for my writing (and giving you something to read).
Sound like a plan?
Instead of a “silent September”, we’ll have a “subdued September” here at Get Rich Slowly. Now and then, I’ll share some quick and interesting money stories.
A History of U.S. Bull and Bear Markets
Here, for instance, is a chart providing a succinct history of the U.S. bull and bear markets since 1926. (Click to open a larger version.)
I love this chart! Produced by
This chart is unique because instead of showing stock market growth as an unconnected line, it deliberately resets each individual bull and bear market to a baseline. Bear markets are shown in red. (Or is that orange?) Bull markets are shown in blue. They’re plotted on a logarithmic scale.
A “bull market” here is defined as running “from the lowest close reached after the market has fallen 20% or more, to the next market high. Similarly, a “bear market” runs “from when the index closes at least 20% down from its previous high, through the lowest close after it has fallen 20% or more”. That’s a little confusing, I know, but if you look at the chart for a few minutes, it should make sense.
According to First Trust Portfolios:
- The average bull market period lasted 9.1 years with an average cumulative return of 476%.
- The average bear market period lasted 1.4 years with an average cumulative loss of -41%.
This chart makes it easy to visualize just how costly it can be to get gun shy after a market crash. If you stop investing — or worse, pull your money out! — you can miss out on huge growth.
The chart also clearly demonstrates that the U.S. stock market has been growing steadily for the past 90+ years with only occasional (relatively minor) speed bumps. If you let your investing policy be dominated by potential drops, you run a real risk of missing out on future gains.
(And honestly? As much as I’m against market timing, I wouldn’t condemn anyone who looked at this chart and thought, “Hm. It looks like we’re near the end of a bull market. Maybe I should cash out for a couple of years.” I don’t plan to do that, but I agree it seems like we’re nearing the end of this cycle.)
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