Analysts Urge Buying in 20% Stock Slumps as Bear Markets Average 289 Days
Updated
Updated · Yahoo Finance · Aug 29
Analysts Urge Buying in 20% Stock Slumps as Bear Markets Average 289 Days
3 articles · Updated · Yahoo Finance · Aug 29
Summary
A 20% market drop typically marks a bear market, and analysts say investors’ best move is to keep buying rather than sell into the decline.
History underpins that advice: U.S. stocks have entered bear territory about every 3.5 years over the past 150 years, while the average bear market lasts 289 days.
Continuing scheduled investments during the slump lets investors use dollar-cost averaging, buying more shares at lower prices and reducing their average cost basis.
That discipline can pay off quickly because more than one-third of the S&P 500’s best days in the past 20 years came within the first two months of a new bull market.
With the last bear market beginning in June 2022, the report frames any next downturn as a normal cycle and a chance to accumulate high-quality assets cheaply.
History shows markets usually recover, but what happens to your dollar-cost averaging strategy if the next downturn triggers a decades-long stagnation?
If U.S. markets spend 78% of their time expanding, why do investors consistently lose fortunes by trying to time the next inevitable crash?
Can you truly distinguish between a temporary market dip and a fundamentally broken asset before you risk your savings buying the dip?