The past month has been one for the record books for sure, but all Bear Markets are in their own “unique” (horrific, crazy, unnerving fill in your own word)way. What is happening? We have never been through anything like this before!
Every Bear Market has its own “unique” characteristics. When I hear people say, “we have never seen this before,” often times that is the truth. We haven’t, but we have seen the markets drop like this before. Please take note of the past 12 Bear Markets noted above.
If you look at each one, they were all “unique” and we could say the same about each of them, “we have never seen this before.” Let’s review the past two Bear Markets:
2001-2002: At that time we said, “we have never seen a sector drop 50-60%”, because we hadn’t before. During that same time we also said, “we had never had an attack on US soil”, because we hadn’t before. Many of us were asking if life would ever go back to some level of normalcy after September 11th. We wondered if attacks like that would happen every month, year? What would life look like going forward?
2008-2009: At that time we said, “we have never been through a liquidity crisis like this before”, which is partly true (as we would have to go back to 1929-30’s), but we hadn’t had anything like that in most of our lifetimes. I can remember watching people on CNBC from Lehman Brothers carrying out their belongings on Friday afternoon, because they knew their company would not exist on Monday.
Today, we are saying the same things, “we have never had a virus led pandemic on US soil before, will life ever go back to normal and if so when?”
Please hear me, I am not suggesting this is not a massive ordeal and that lives are not being affected by any of this. They are and there are a lot of families struggling right now. It is a tough time for our country, but I do believe in my heart that we will come back from this better, because we always have.
We will figure this out, every one of reasons that lead to the prior 12 Bear Markets was based on something we had never seen before, but WE figured it out and grew from it.
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