Corrections and Bears since 1900

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pkcrafter
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Corrections and Bears since 1900

Post by pkcrafter » Sat Jan 20, 2018 8:24 pm

Here's an article that shows the number and length of corrections and bear markets from 1900. If you are fairly new to investing and are nervous, this information may help, but I'll also add if you are really worried about your asset allocation, it may be too high. Having said that, if you cut back on equity %, stay there. Do not raise it the next time you are feeling confident. Right now a correction is likely, but if there is some sort of catalyst, the market will bomb and we will have an angry bear.

Correction: A drop of 10-19%. 123 since 1900
Bear: A drop of 20% or more. 32 since 1900.

If you want to be a Boglehead (efficient investor) you have to have the right AA and hold for years/decades.

I don't necessarily agree with the article on what you should do and when.

https://www.cnbc.com/2015/08/24/8-thing ... rkets.html

Paul
When times are good, investors tend to forget about risk and focus on opportunity. When times are bad, investors tend to forget about opportunity and focus on risk.

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iceport
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Re: Corrections and Bears since 1900

Post by iceport » Sat Jan 20, 2018 9:11 pm

pkcrafter wrote:
Sat Jan 20, 2018 8:24 pm
If you want to be a Boglehead (efficient investor) you have to have the right AA and hold for years/decades.

I don't necessarily agree with the article on what you should do and when.
Interesting glance back at some historical data. But I agree with you on both points above. Items 5 through 8 are best ignored. It's interesting to note that 2.5 years ago we were due for a correction and volatility was expected to increase.
"Discipline matters more than allocation.” ─William Bernstein

pkcrafter
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Re: Corrections and Bears since 1900

Post by pkcrafter » Sat Jan 20, 2018 9:18 pm

iceport wrote:
Sat Jan 20, 2018 9:11 pm
pkcrafter wrote:
Sat Jan 20, 2018 8:24 pm
If you want to be a Boglehead (efficient investor) you have to have the right AA and hold for years/decades.

I don't necessarily agree with the article on what you should do and when.
It's interesting to note that 2.5 years ago we were due for a correction and volatility was expected to increase.
Yep, that's the market.


Paul
When times are good, investors tend to forget about risk and focus on opportunity. When times are bad, investors tend to forget about opportunity and focus on risk.

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Rowan Oak
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Re: Corrections and Bears since 1900

Post by Rowan Oak » Sat Jan 20, 2018 9:23 pm

iceport wrote:
Sat Jan 20, 2018 9:11 pm
pkcrafter wrote:
Sat Jan 20, 2018 8:24 pm
If you want to be a Boglehead (efficient investor) you have to have the right AA and hold for years/decades.

I don't necessarily agree with the article on what you should do and when.
Interesting glance back at some historical data. But I agree with you on both points above. Items 5 through 8 are best ignored. It's interesting to note that 2.5 years ago we were due for a correction and volatility was expected to increase.
And on December 6, 2017 when Vanguard Total Stock Market Index Fund Admiral Shares (VTSAX) was 6% lower than today ($65.81 12/6/17 to $70.06 1/20/18) Vanguard said the chance for a correction in 2018 is 70%; the highest they'd seen in last 15 years.
“If you can get good at destroying your own wrong ideas, that is a great gift.” – Charlie Munger

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