{"id":57219,"date":"2022-06-22T14:42:45","date_gmt":"2022-06-22T18:42:45","guid":{"rendered":"https:\/\/www.ino.com\/blog\/?p=57219"},"modified":"2022-06-22T15:18:37","modified_gmt":"2022-06-22T19:18:37","slug":"bear-market-qa","status":"publish","type":"post","link":"https:\/\/wwwtest.ino.com\/blog\/2022\/06\/bear-market-qa\/","title":{"rendered":"Bear Market Q&#038;A"},"content":{"rendered":"<p>The main question of bull or bear market has been answered quite loudly - BEAR!!! Now more investors are getting the memo and running for the exits at the same time. Steve Reitmeister, CEO of <a href=\"https:\/\/stocknews.com\/\" target=\"_blank\" rel=\"noopener\">StockNews.com<\/a> and Editor of the Reitmeister Total Return, is here to answer some questions about the current bear market.<\/p>\n<p><strong>Q: How long will this bear market last?<\/strong><\/p>\n<p>A: The average bear market in history has lasted for 13 months. That is measured from peak to valley. So in this case the peak of 4,818 was set on January 4, 2022. So if things went according to schedule we would say bottom is likely to be found around February 2023.<\/p>\n<p>However the stock market rarely does anything according to schedule leading to the next question\u2026<\/p>\n<p><strong>Q: Do you believe this bear market will be longer or shorter than the 13 month average?<\/strong><\/p>\n<p>A: I think it will be shorter because everything about the modern market works faster. Meaning that with so much computer based trading, volatility has increased with stocks rising and falling faster than ever before.<\/p>\n<p>So quite possibly we find bottom faster this time around as well.<\/p>\n<p><strong>Q: Does that mean you expect stocks to fall less than the 34% average bear market decline because it will be a shorter time period?<\/strong><\/p>\n<p>A: Unfortunately not. I suspect we will wind up a bit closer to 40% decline given that the low rate TINA environment pushed stocks to higher than normal PE levels.<\/p>\n<p>In fact many of the glamorous growth stocks of 2021 were seeing valuations not that far off the 1990\u2019s tech bubble style levels. From that higher peak it will likely be a steeper than normal drop to find equilibrium.<\/p>\n<p>Note that 3,180 represents a 34% decline from peak. And 2,891 is where we end up if 40% decline is in the cards.<\/p>\n<p><strong>Q: How should one interpret a positive day for stocks like today if we are in the midst of a bear market?<\/strong><\/p>\n<p>A: Consider this... does a bull market go straight up?<\/p>\n<p>Of course not. There are extended bull runs followed by pullbacks and corrections. Yet as you look back over time the gains of the bull are undeniable.<\/p>\n<p>Bear markets are no different. They don\u2019t go straight down either. It is an ongoing process of bear runs to new lows followed by bounces and then another leg lower so on and so forth til bottom is found.<\/p>\n<p>Now everything I said is my current guestimate with a wide range of potential outcomes. NOTHING about this bear, or any other, will go according to a preset pattern. That means we need to be flexible to adjust our plan according to the realities on the ground.<\/p>\n<p>That includes when we start bottom fishing for the next bull run. We would rather be a touch early than a touch late.<\/p>\n<p>That\u2019s because on the late side there is usually a wicked 10-20% bounce from bottom that catches everyone by surprise.<\/p>\n<p>So I suspect we will kind of work our way back to fully invested in 2-3 phases to never be leaning too far in the wrong direction when the market is finally ready to explode off the bottom.<\/p>\n<p>Right now I imagine that first attempt at buying bottom would be around -30%\u2026then down 34%\u2026then hold on to that last part to see if indeed -40% is in the cards. However, at this stage we are getting WAY ahead of ourselves.<\/p>\n<p>For now, there is likely a few months\u2019 worth of bear market to come. Scary drops\u2026shocking bounces (rinse and repeat).<\/p>\n<p><em>Wishing you a world of investment success!<\/em><\/p>\n<p>Steve Reitmeister\u2026 but everyone calls me Reity (pronounced \u201cRighty\u201d)<br \/>\nCEO, <a href=\"https:\/\/stocknews.com\/\" target=\"_blank\" rel=\"noopener\">StockNews.com<\/a> & Editor, Reitmeister Total Return<\/p>\n<hr \/>\n<p><strong>About the Author<\/strong><\/p>\n<p>Steve is better known to the StockNews audience as \u201cReity\u201d. Not only is he the CEO of the firm, but he also shares his 40 years of investment experience in the Reitmeister Total Return portfolio. <a href=\"https:\/\/stocknews.com\/authors\/?author=steve-reitmeister\" target=\"_blank\" rel=\"noopener\">Learn more about Reity\u2019s background, along with links to his most recent articles and stock picks.<\/a><\/p>\n<!-- AddThis Advanced Settings generic via filter on the_content --><!-- AddThis Share Buttons generic via filter on the_content -->","protected":false},"excerpt":{"rendered":"<p>The main question of bull or bear market has been answered quite loudly - BEAR!!! Now more investors are getting the memo and running for the exits at the same time. Steve Reitmeister, CEO of StockNews.com and Editor of the Reitmeister Total Return, is here to answer some questions about the current bear market. Q: [&hellip;]<!-- AddThis Advanced Settings generic via filter on get_the_excerpt --><!-- AddThis Share Buttons generic via filter on get_the_excerpt --><\/p>\n","protected":false},"author":41,"featured_media":57066,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[601],"class_list":["post-57219","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-general","tag-bear-market"],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v23.4 (Yoast SEO v23.6) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Bear Market Q&amp;A - INO.com Trader&#039;s Blog<\/title>\n<meta name=\"description\" content=\"Steve Reitmeister, CEO of StockNews.com and Editor of the Reitmeister Total Return, is here to answer some questions about the current bear market.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.ino.com\/blog\/2022\/06\/bear-market-qa\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Bear Market Q&amp;A - 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