Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Bear market background
Old 07-10-2008, 11:30 AM   #1
Thinks s/he gets paid by the post
free4now's Avatar
 
Join Date: Dec 2005
Posts: 1,225
Bear market background

I found this article interesting, especially the table listing the various historical bear markets:

Bears on the prowl in S&P 500

Quote:
The S&P 500 has entered 12 bear markets since 1937. On average, they lasted 19 months and reduced the S&P 500 index by 34 percent.
__________________

__________________
free4now is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 07-10-2008, 02:01 PM   #2
Full time employment: Posting here.
CitricAcid's Avatar
 
Join Date: May 2008
Posts: 546
Oh well, for those of us who have a while before retirement, I think it is fune, considering the wholesale discount prices we will be getting on our purchases.
__________________

__________________
CitricAcid is offline   Reply With Quote
Old 07-10-2008, 02:21 PM   #3
Moderator Emeritus
CuppaJoe's Avatar
 
Join Date: Jun 2007
Location: At The Cafe
Posts: 6,866
If it's any consolation, I started investing in equities in 1972. I'm sure that bear era plus continuing on in several bull markets is what got me to FI by age 60 despite goofing off in semi-retirement for years and never having a high salary.
__________________
CuppaJoe is offline   Reply With Quote
Old 07-10-2008, 02:49 PM   #4
Recycles dryer sheets
mike hall's Avatar
 
Join Date: Jan 2008
Posts: 67
I'm not a statistics expert, and I'm sure one will come along and slap me down soon, but that data is so widely dispersed (length of bear market) that I don't think that 19 month average means much. About all you can get from the table in that article is that it's anyones guess.
__________________
mike hall is offline   Reply With Quote
Old 07-10-2008, 04:12 PM   #5
Recycles dryer sheets
 
Join Date: May 2005
Location: Newport Beach
Posts: 122
Quote:
Originally Posted by mike hall View Post
I'm not a statistics expert, and I'm sure one will come along and slap me down soon, but that data is so widely dispersed (length of bear market) that I don't think that 19 month average means much. About all you can get from the table in that article is that it's anyones guess.
I also wonder where it is written that once the market is down > 20% it must then decline to at least the average bear market decline level.
__________________
newporttony is offline   Reply With Quote
Old 07-10-2008, 04:29 PM   #6
Thinks s/he gets paid by the post
free4now's Avatar
 
Join Date: Dec 2005
Posts: 1,225
Obviously there's no reason to assume the future will be exactly the average of what happened in the past. But the data in the table was interesting to me... the fact that the longest bear was only 62 months and that most are much shorter is hopeful to me.
__________________
free4now is offline   Reply With Quote
Old 07-10-2008, 04:37 PM   #7
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
haha's Avatar
 
Join Date: Apr 2003
Location: Hooverville
Posts: 22,386
Quote:
Originally Posted by free4now View Post
Obviously there's no reason to assume the future will be exactly the average of what happened in the past. But the data in the table was interesting to me... the fact that the longest bear was only 62 months and that most are much shorter is hopeful to me.
I see what you mean. Only 54 months to go.

Ha
__________________
"As a general rule, the more dangerous or inappropriate a conversation, the more interesting it is."-Scott Adams
haha is online now   Reply With Quote
Old 07-10-2008, 04:37 PM   #8
Moderator
ziggy29's Avatar
 
Join Date: Oct 2005
Location: Texas
Posts: 15,613
Quote:
Originally Posted by newporttony View Post
I also wonder where it is written that once the market is down > 20% it must then decline to at least the average bear market decline level.
I don't think anyone said it has to go down to the average *at minimum*. If that were the minimum, it wouldn't also be the average.
__________________
"Hey, for every ten dollars, that's another hour that I have to be in the work place. That's an hour of my life. And my life is a very finite thing. I have only 'x' number of hours left before I'm dead. So how do I want to use these hours of my life? Do I want to use them just spending it on more crap and more stuff, or do I want to start getting a handle on it and using my life more intelligently?" -- Joe Dominguez (1938 - 1997)

RIP to Reemy, my avatar dog (2003 - 9/16/2017)
ziggy29 is offline   Reply With Quote
Old 07-10-2008, 04:57 PM   #9
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
youbet's Avatar
 
Join Date: Mar 2005
Location: Chicago
Posts: 9,965
Quote:
Originally Posted by mike hall View Post
I'm not a statistics expert, and I'm sure one will come along and slap me down soon, but that data is so widely dispersed (length of bear market) that I don't think that 19 month average means much. About all you can get from the table in that article is that it's anyones guess.
I'm not a statistics expert either, but a guy who is once told me that any measure of central tendency means little without the corresponding measure of dispursement.
__________________
"I wasn't born blue blood. I was born blue-collar." John Wort Hannam
youbet is offline   Reply With Quote
Old 07-10-2008, 05:13 PM   #10
Moderator
ziggy29's Avatar
 
Join Date: Oct 2005
Location: Texas
Posts: 15,613
Quote:
Originally Posted by youbet View Post
I'm not a statistics expert either, but a guy who is once told me that any measure of central tendency means little without the corresponding measure of dispursement.
Translation: What's the standard deviation?
__________________
"Hey, for every ten dollars, that's another hour that I have to be in the work place. That's an hour of my life. And my life is a very finite thing. I have only 'x' number of hours left before I'm dead. So how do I want to use these hours of my life? Do I want to use them just spending it on more crap and more stuff, or do I want to start getting a handle on it and using my life more intelligently?" -- Joe Dominguez (1938 - 1997)

RIP to Reemy, my avatar dog (2003 - 9/16/2017)
ziggy29 is offline   Reply With Quote
Old 07-10-2008, 05:21 PM   #11
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
youbet's Avatar
 
Join Date: Mar 2005
Location: Chicago
Posts: 9,965
Quote:
Originally Posted by ziggy29 View Post
Translation: What's the standard deviation?
Sure. Or the variance. Or even the range if there are only a few data points. But averages (or any of the measures of central tendency) alone are scary and frequently misused. Some of my favorite examples of this are folks' interpretations of Firecalc runs!
__________________
"I wasn't born blue blood. I was born blue-collar." John Wort Hannam
youbet is offline   Reply With Quote
Old 07-10-2008, 05:41 PM   #12
Recycles dryer sheets
mike hall's Avatar
 
Join Date: Jan 2008
Posts: 67
Quote:
Originally Posted by free4now View Post
Obviously there's no reason to assume the future will be exactly the average of what happened in the past. But the data in the table was interesting to me... the fact that the longest bear was only 62 months and that most are much shorter is hopeful to me.
I'm not really a cynic, and not intending to jerk your chain, but maybe the message is: The longest S&P 500 bear market was 62 months....so far.
__________________
mike hall is offline   Reply With Quote
Old 07-11-2008, 07:37 AM   #13
Thinks s/he gets paid by the post
 
Join Date: Jun 2005
Posts: 1,543
the article doesn't say anything about the difference between secular and cyclical bear markets
__________________
al_bundy is offline   Reply With Quote
Old 07-11-2008, 09:09 AM   #14
Full time employment: Posting here.
 
Join Date: Jun 2006
Posts: 926
Quote:
Originally Posted by mike hall View Post
I'm not a statistics expert, and I'm sure one will come along and slap me down soon, but that data is so widely dispersed (length of bear market) that I don't think that 19 month average means much. About all you can get from the table in that article is that it's anyones guess.
Mike,
...You are right about that table. It is impossible to interpet from the table anything about what happens in the future. To me the more important issue is what is not in that table and that is that the market came back after every one of those declines.
Jeff
__________________
jclarksnakes is offline   Reply With Quote
Old 07-11-2008, 09:53 AM   #15
Recycles dryer sheets
ikubak's Avatar
 
Join Date: Dec 2007
Posts: 391
So if you define a bear market as a loss of 20% from the peak and the average bear market has a decline of 34%, then when you officially enter an average bear market, the worst part of the total decline is already over. Sure it would be great to buy when the market is down 34% and catch that bear at the bottom, but it seems to me like once you hit bear market territory (-20%) it's probably time to start buying if you have some cash you want to invest. The average bear market lasts 19 months? Then spread out your purchases over a similar period and you should do OK. Of course, if it's "different" this time, then we may all be screwed.
__________________

__________________
Retire date Jan. 10, 2018
ikubak is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
Bear market perspectives clifp FIRE and Money 27 03-22-2008 06:35 PM
Another Bear Market Looming? Rosalita FIRE and Money 74 07-14-2006 10:45 AM
secular bear market NYCGuy FIRE and Money 55 03-14-2006 01:54 AM
A Bear Market In Bonds yakers FIRE and Money 6 03-11-2006 05:06 AM
A 100-year bear market? farmerEd Other topics 38 10-17-2004 06:44 PM

 

 
All times are GMT -6. The time now is 08:45 PM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.