NOW It’s An Official Bear Market. Some Thoughts…

It’s official, the U.S. stock market has been in a bear market since it’s all-time closing high on February 19, 2020. Yesterday, the U.S. market had it’s worst day since Black Monday 1987 (market lost over 22% in a single day).

  • This is the fastest retreat to a bear market from an all-time high in history taking just 16 trading days.
  • This ends the bull market that began with the cycle low on March 9, 2009 for an eleven year run and 400% price appreciation. That run makes it both the longest and strongest bull market on record!
  • The S&P 500 is down about 27% from its 2/19/2020 all-time high as of yesterday’s close, which is a level first seen on August 7, 2017 essentially wiping out 2.5 years of appreciation.
  • The market would have to climb over 36% from yesterday’s close to get back to the all-time highs.
  • For contrast, the foreign stock market (MSCI All Cap World Index) has been in a bear market since January 26, 2018 and is only up about 60% from the March 9th, 2009 lows.

Yesterday, sentiment hit EXTREMELY low levels with CNN’s Fear Greed Index at a record low of just 1.

Continue reading “NOW It’s An Official Bear Market. Some Thoughts…”

Fastest Correction In History…And The Importance of Financial Projections

Last Friday I wrote a market commentary to reiterate my concerns about market valuations but primarily focused on the fact that some technical (short-term) indicators were hitting historical extremes implying the potential for short-term problems in the market.

Last Thursday the S&P 500 closed at $3,386…an all-time high. Today the S&P 500 closed at $2,978 for over a 12% loss in a week. That’s a truly historic move. It’s the fastest correction in history for the S&P 500 and the fastest for the Dow since 1928 just a few months before the Great Depression. The Dow and the S&P 500 are on track for their worst weekly performance since the Great Financial Crisis in 2008. Continue reading “Fastest Correction In History…And The Importance of Financial Projections”

What is a Safe Portfolio Withdrawal Rate To Ensure Your Money Lasts?

One of the more important questions I try to answer via the financial planning process is, “How much can I withdraw from my portfolio each year and not run out of money?” Or the inverse of that, which is, “How much do I need to have saved in order to retire and sustain my current lifestyle without running out of money?”

To answer the question specifically for your unique circumstances we would need to prepare custom financial projections, however, there are some general rules of thumb that can serve as a starting point. Continue reading “What is a Safe Portfolio Withdrawal Rate To Ensure Your Money Lasts?”