A Bear Market Begins

On Christmas Eve, the S&P 500 entered bear market territory. The index closed more than 20% below its all-time high set during the September 20 trading session. Stocks may or may not have further to fall; at some point, they will reach a bottom and ascend again.1

If you have kept an eye on Wall Street lately, you may have seen this moment coming. Investors have been discouraged by a hawkish Federal Reserve, a U.S.-China trade war seemingly far from a truce, and a widespread perception that global growth is slowing. Occasionally, the market delivers a lesson on how quickly its fortunes can change; this is the latest example.

How long could this bear market last? That is unknown, but if history is any guide, it could persist across 2019. Examining the bear markets seen during 1946-2009, the average length was 13 months, with an average dip of 30.4% from an S&P 500 peak.2

What do investors want to consider now? If you are a younger investor steadily contributing to retirement accounts, keep doing so and do not let the bear scare you. After all, a bear market gives you an opportunity to buy low. If you are a decade or more away from retirement, stay invested and take heart in the fact that the longest bear market in the post-WWII era lasted but 31 months. If you are about to retire or newly retired, it is time to take a look at how this development may affect your accumulated retirement savings and your potential retirement income streams.2

This material was prepared by MarketingPro, Inc. for use by The Helmstar Group

1 - washingtonpost.com/business/2018/12/24/trumps-white-house-tried-calm-markets-it-backfired [12/24/18]

2 - cnbc.com/2018/12/24/whats-a-bear-market-and-how-long-do-they-usually-last-.html [12/24/18]

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