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MoneyGuy · 10-29-2008, 08:11 PM

I've added another point to my list:

1. The market usually leads the economy into recovery by six to eight months because investors make their decisions in anticipation of what they expect to happen, and those decisions are what drives the market. Therefore, if we expect an economic recovery mid way through 2009, it stands to reason that you should begin considering moving into the market gradually maybe starting early in 2009.
2. History shows that investors tend to make up 80% of bear market losses within the first year of the recovery, according to Standard & Poor’s Equity Research. This is American but it’s much the same in Canada.
3. Also from S&P: equities typically recoup a third of what they lost in a bear market in the first 40 days of the recovery.
4. Stock prices are low. This is not to say they’ve bottomed, but prices are lower than they were at the start of 2000.
5. For investors whose faith in equities are wavering, consider the last time they performed so poorly: the 1930s. Investors who may have concluded that stocks were not the place to be would have lost out on decades of bull markets.
6. So far this year, investors have pulled more money out of stock funds than they’ve put in. This is the third time in recent memory that this has been the case. The other two were in 2002, just before a five-year bull market, and in 1988, the start of a 12-year bull. Investors who refuse to get into the market usually don’t make it back in time to enjoy the recovery.
7. Whenever the bottom is reached (whenever that is), you’ll never see those prices again. Yes there will be market crashes, but the next one will not bring prices to these levels. Remember that the best time to invest is when things are their bleakest. I don’t know if this is as bleak as it gets. J
8. Going back to the mid '50s, bear markets are down 30% on average over 11 months and the recoveries average 161% over the next five years.

Bottom line: The recoveries happen when you least expect. They're quick and dramatic. They're spring loaded. Don't miss the recovery.

10-29-2008, 08:11 PM	#401
MoneyGuy Franchise Player Join Date: May 2006 Exp:	I've added another point to my list: 1. The market usually leads the economy into recovery by six to eight months because investors make their decisions in anticipation of what they expect to happen, and those decisions are what drives the market. Therefore, if we expect an economic recovery mid way through 2009, it stands to reason that you should begin considering moving into the market gradually maybe starting early in 2009. 2. History shows that investors tend to make up 80% of bear market losses within the first year of the recovery, according to Standard & Poor’s Equity Research. This is American but it’s much the same in Canada. 3. Also from S&P: equities typically recoup a third of what they lost in a bear market in the first 40 days of the recovery. 4. Stock prices are low. This is not to say they’ve bottomed, but prices are lower than they were at the start of 2000. 5. For investors whose faith in equities are wavering, consider the last time they performed so poorly: the 1930s. Investors who may have concluded that stocks were not the place to be would have lost out on decades of bull markets. 6. So far this year, investors have pulled more money out of stock funds than they’ve put in. This is the third time in recent memory that this has been the case. The other two were in 2002, just before a five-year bull market, and in 1988, the start of a 12-year bull. Investors who refuse to get into the market usually don’t make it back in time to enjoy the recovery. 7. Whenever the bottom is reached (whenever that is), you’ll never see those prices again. Yes there will be market crashes, but the next one will not bring prices to these levels. Remember that the best time to invest is when things are their bleakest. I don’t know if this is as bleak as it gets. J 8. Going back to the mid '50s, bear markets are down 30% on average over 11 months and the recoveries average 161% over the next five years. Bottom line: The recoveries happen when you least expect. They're quick and dramatic. They're spring loaded. Don't miss the recovery.