Subject: Re: What constitutes success?
Jim wrote: I don't really try to dodge bear markets as such.
Just to be clear, I don't either. I try to capitalize on them. Dodging them by definition means going 100% to cash.
Let me illustrate from an article I write to start every year. This was released on 1/1/2022. It concerns the historical cases when inflation has reached six percent.
6.00% Date Date S&P 500 S&P 500 S&P 500 S&P 500
Months Begins Ends Max Price Min Price % Drop Peak Date Trough Date
4 4/30/1902 8/30/1902 $8.85 $6.26 -29.27% 9/30/1902 10/31/1903
6 10/31/1902 4/30/1903 $8.85 $6.26 -29.27% 9/30/1902 10/31/1903
1 2/28/1907 3/31/1907 $10.03 $7.45 -25.72% 9/30/1906 9/30/1907
6 5/31/1907 11/30/1907 $9.93 $6.25 -37.06% 11/30/1906 11/30/1907
14 4/30/1909 6/30/1910 $10.23 $8.64 -15.54% 10/31/1909 7/31/1910
12 4/30/1912 4/15/1913 $9.86 $8.12 -17.65% 9/30/1912 6/30/1913
2 4/15/1916 6/15/1916 $10.21 $6.80 -33.40% 11/30/1916 12/31/1917
55 7/15/1916 1/15/1921 $10.21 $6.27 -38.58% 11/30/1916 6/22/1921
24 9/15/1941 9/15/1943 $10.47 $7.47 -28.65% 7/28/1941 4/28/1942
28 8/15/1946 12/15/1948 $19.25 $13.55 -29.61% 5/29/1946 6/13/1949
12 2/15/1951 2/15/1952 $22.81 $20.96 -8.11% 5/3/1951 6/29/1951
3 1/15/1970 4/15/1970 $99.23 $68.61 -30.86% 11/10/1969 5/26/1970
3 5/15/1970 8/15/1970 $97.36 $68.61 -29.53% 11/17/1969 5/26/1970
34 9/15/1973 7/15/1976 $115.47 $60.96 -47.21% 3/15/1973 10/4/1974
66 4/15/1977 9/15/1982 $107.97 $86.45 -19.93% 1/3/1977 3/1/1978
4 10/15/1990 2/15/1991 $369.78 $294.51 -20.36% 7/16/1990 10/11/1990
14 11/10/2021 12/31/2022 $4,818.62 $3,491.58 -27.54% 1/4/2022 10/13/2022
17 Average 1900-2020 -27.55%
The average drop from 1900 to 2020 has been -27.55% in the S&P 500. The drop from the high in November of 2021 to the low in 2022 was -27.55%. It is pretty rare for a repeat to occur at this level of closeness, but it does happen. It makes no sense to me to know this information and then ignore it! Why do that?