Question of the week: What do we know?

For those with images turned off: “Tell me… If we don’t know when we’re OUT of a pandemic…or when we are IN a recession. What do we know?”

We’re no economists or health experts, but here are some things we do know about markets:

1/ Bear markets are unavoidable. Over a 50-year period, expect 14 bear markets — roughly one every 3.6 years.

2/ What comes after a bear market? A bull market. Stocks fall 36% on average during bear markets — and gain 114% on average during bull markets.

3/ Bear markets are shorter than bull markets — which are 3.4x longer on average.

But no one can tell when markets will recover. Here’s some detective work from #fintwit:

And, of course, the numbers mentioned above are the average, and not all stocks will make it back to new highs. Some companies will go bankrupt, and others will continue to struggle as bad business models are exposed.

But we can trust the S&P 500 to recover. If it doesn’t, we probably have a much bigger problem on our hands. In the long run, does it matter whether we’re in a recession or not, or if the pandemic is over?