The Big Picture of Bear Market - How to Invest during this Covid-19 Situation

Do Not Panic

Is there still hope for the recent sell-off because of this Covid-19 issue?

If we look back at historical data of the stock market crisis, all the time, after the sell-off, the months after that, the market will rebound again.

So as long term investors, we have really need to stay calm and have a forward-thinking strategy.

Do not panic and in fact, take the opportunity to add good quality stock to your portfolio in stages.

Do dollar-cost averaging.


Hope is in the future


In times like these, it’s also important for investors to take a step back and remember how the stock market works.

Investors get long stretches of gains when the market trends higher (approximately +400% in this most recent bull run), and then from time to time, we experience clusters of scary downside volatility and bear markets when 20+% is quickly wiped out.

(***4)But then when the crisis fades and fears abate, the next twelve months consistently delivers a strong comeback:




The top 10 worst bear markets (using the Dow) following the Great Depression shows that it declines on average by -39.27%. And it lasts on average of 16.9 months.

The biggest bear market in that study was the last one (10/2007-3/2009) during the housing/financial crisis. It was dubbed the Great Recession and the market plunged by -54.43%.

But the rallies that followed have been even bigger. Within a year after a bear market, stocks surge on average of 44.74%. And go on to gain on average 66.34% by year 3.

BTW, following the Great Recession, the market gained 63.40% in year 1; 100.58% by year 3; 153.58% by year 5; and more than 357% during the entire 11+ year bull market.)


Key Takeaway

• Always stay calm and do not panic.

• Have a long term view of the market.

• The historical data can guide us to make better decision in our investment that can benefits us in thelong run.

• Most of the bear market will eventually ends, and market will bounce back higher after that.

• Up and down in the market are normal and will surely happen. We need to have a balance outlook.

Final note, please duduk rumah diam diam,

or diam selama-lamanya.

Note: The above data is sent to me by Zacks Investment Management through their EDM.

Check out this video for more info about Asia Financial Crisis (AFC):

Happy Investing! 😉