Bear Market Episode Offering Bargains and a Bottom for a New Bull Run?

Image credit

Eddy Elfenbein writes in an unperturbed tone:

Don’t Let the Market Scare You

I wanted to say a few words about the recent stock market. Obviously, it’s been highly volatile, and I won’t predict that the selling is over. However, I think the worst is probably over, and it’s reasonable for investors to act as if it were.

In most bear markets, the damage is concentrated in a short time period. This time, the S&P 500 lost 15.7% in 14 trading days. Even if we go lower, I doubt we’ll see another stretch quite that bad.

Please keep in mind that bear markets often have false rallies. Many of the best days in market history have come during bear markets. All that selling causes a massive reaction, but it doesn’t spell the end of the correction. Don’t be fooled. We’re going to see more volatility. Things will start to settle down once we cross above the 200-day moving average.

Bear markets are a natural part of investing. Expect a few more retests. Bear markets are usually over before anyone realizes it. It sounds obvious to say, but bull markets always start at the bottom of bear markets. The last few weeks have given investors a lot of bargains. This isn’t the time to get scared of them.