There is no doubt about it. Sometimes it is hard to be an investor. Last quarter was one of those times. Now the question is: When will the bull market be back? The fact is, no one knows, but stocks always rebound. As Karin Risi of Vanguard Funds puts it, “We believe it is a matter of when, not if.”
As challenging as it may be, “If you are patient during periods of stress and dislocation, we believe it’s more likely than not you’ll eventually be rewarded… Strong bull markets have tended to begin suddenly, even explosively,” Risi said.
Vanguard reviewed nine bear markets going back to 1960. In eight of nine cases, the market rallied strongly during the year after hitting bottom. For example, between November 1980 and August 1982, the S&P 500 was down 27% from its peak. Yet one year later, the S&P 500 was up an eye-popping 56%. In other words, being out of the stock market can be more costly and risky than sometimes meets the eye. In times like these, it is usually best to remain calm and stand your ground.
That advice may sound easier said than done. Rick Ferri, a Forbes.com contributor, recently provided some easy, homespun suggestions for dealing with today’s bear. Here are a few: go for a walk, and take the dog if you have one; go see a dumb movie (that shouldn’t be too hard to find); go for a nice meal at your favorite restaurant; or watch House Hunters International and steer clear of Jim Kramer’s Mad Money.
Ferri sums it up well, writing, “How many times has the stock market recovered from a sharp sell-off during your lifetime? The answer is, every time!”