When will it stop?
We are now in the 13th worse 'Bear Market' since the late 1920's.
Published March 24, 2020 Tim Lofton | Partner
We are hovering around a 30% loss. Given the fact that we have had a 47% chance of this happening for the last 2 years, it is not surprising. The "surprise" is always the 'WHY'. I do not think anyone saw a bat virus taking down the world economy, but here we are.
Looking past this pandemic the question is how quickly will things recover? What kind of recovery will we have? There are many questions swirling around this latest economic mushroom cloud.
Here is what I do know - History. Why do I believe we will get past this? Because we always do. 100% of the time that we have experienced "the end of the world" economically, we have recovered. I do not believe this will be the first time that we do not.
Below is the history of recovery:
Unfortunately, I have no idea the answers to the "???" above. This is definitely a different scenario as it has been a global crisis and thus the impact can be stronger and last longer. The current economic outlook is that we will see a "L" shape recovery. This makes sense to me from a historical perspective. The question on everyone's mind including my own, is where is the bottom and that can only be answered in the weeks and months to come as we see how the Covid-19 virus responds to the drastic measures taking by our world governments.
One last thing that we need to understand is the math behind recovery. Remember that it is not down 30% up 30% and we are back to even. The math does not work like that. This chart explains the math of decline and recovery.
Market Return Needed to Recover Loss
As I have mentioned in previous articles, if you are not interested in staying on this ride, it is ok to get off. For most investors, even at a 30% decline their values are close to January 2019 start values. If you are not sure where things are going to end up and you are concerned about long-term impact talk to your advisor about sitting on the sidelines until the future is a little clearer.
Recommended by LinkedIn
You can watch The Retirement Blueprint Show on NBC or by clicking here for previous episodes:
Listen to the Blueprint Radio Hour and Stream on your favorite device and streaming service:
Advisory services are offered through Axim Wealth Management LLC dba Axim Planning & Wealth, an SEC Registered Investment Advisor. Insurance products and services are offered through various companies. Axim Planning & Wealth only transacts business in states where it is properly registered, or is excluded or exempted from registration requirements. SEC registration does not constitute an endorsement of the firm by the Commission nor does it indicate that the adviser has attained a particular level of skill or ability. Outgoing and incoming emails are electronically archived and subject to review and/or disclosure to someone other than the recipient. Axim Planning & Wealth cannot accept requests for securities transactions or other similar instructions through email. Axim Planning & Wealth cannot ensure the security of information emailed over the Internet, so you should be careful when transmitting confidential information such as account numbers and security holdings. If the reader of this message is not the intended recipient, or an employee or agent responsible for delivering this message to the intended recipient, you are hereby notified that any dissemination, distribution or copying of this communication is strictly prohibited. If you have received this communication in error, please notify us immediately by replying to this message and deleting it from your computer.
For any questions regarding tax planning or estate planning, please contact an experienced estate or tax planning attorney. The following is for informational purposes only and is not intended as advice. By reading this article you agree to the general nature of the content and any actions taken from this article are based on your own personal decisions and not from information in this article.
Director Dayton Realltors,Ohio Realltors Director, Dayton Realtors 2024 Treasurer
4yTim “prop that bear up”