Signs of recovery?

Just as spring seems to be sprung, the markets seem to be springing back.

Last month, we wrote about big mountains and little icebergs and shared a graph that compares the longevity of bull markets with bear markets over the years.

To build on that, have a look at this timeline diagram, courtesy of our friends at Betafolio.

As you can see, the lowest bear market was in the 1970s, represented by the brown line, number 7. Note the steep recovery once it had hit the bottom! You wouldn’t have wanted to be out of the market then.

The current crisis is represented by the dark green line, C, which shows a sharp fall that already seems to be bouncing back.

Note that this doesn’t mean all our troubles are over. Despite the recent upward tick, it could always tick down again. We just don’t know how long this will last. Nobody does. In fact, the timeline shows bear markets ranging from 23 months to 154 months. That said, the tide may already be turning, so it does show hope.

Here’s another graph to help reassure you:

The higher the Trivium number, the greater the percentage of equities in the portfolio.

See how there can be an initial loss over one year (especially when there are more equities), however, over three or five years, cumulative performance is consistently good.

This evidence reinforces the message we keep repeating:

  • Recovery waits for no-one
  • Stick to the plan
  • Stay invested and ride it out

We’re always here to support you, so if you have any concerns or questions, do give us a call.

P.S. This article highlights the key points. If you’d like to dig deeper into the data, click here to download the full report.

Lance Baron

Certified Financial Planner (CFP) based in East Sussex, UK. We support people in Southeast England with more than £500K to invest by building a financial plan that will help them live the life they want… until age 100