Duration of a recession, of bear market etc.

Starting with the exponential use of online activities and communications I don't think that historical data hold much. Not just for the economy but other areas like politics.

But the suggestions are valid. So thanks for posting.

This downturn only negates last year's 20% plus gains.

I organize my money into a year's worth of liquid cash, a savings account with five years worth of money, and long-term investment in mutual funds.

I intend to ride it out with my long-term investment in mostly index stock funds. They seem to always bounce back within a year or two.

Thanks to a 10% increase in prices (according to the CPI), and a decline of 3.7% in the Vanguard Total (U.S.) Stock Market Index Fund VTSAX (this includes reinvested distributions, so it is total return).

The 3.7% decline in VTSAX in nominal dollars combined with a 10% reduction in the purchasing power of a dollar results in a 13.3% decline in the purchasing power of this portfolio since the end of January 2021.

I chose January 2021 as the starting point because it's about when the upward bend in the CPI curve began. https://data.bls.gov/timeseries/CUSR0000SA0

Separately, my FIXED DOLLAR annuity has lost 10% of its purchasing power since January 2021. And unlike stocks, purchasing power doesn't "bounce back" or "recover" after a while, but rather continues to erode and erode and erode, though hopefully at a slower rate than lately. So I'm lovingly kissing away forever 10% of the annuity's value. In just 1 1/2 years.

More detail https://www.democraticunderground.com/111693491

In the past 95 years,

How many years did the stock market have big loss, 12% or more?

How many years with a small loss, 0% to 12%?

How many with a small gain .1% to 11.9%?

How many with large gain, 12% or more?


I think you will be surprised at the answers.

larger than 14%, some years less than 14%, but the average such was 14%. So years with double digit pullbacks are the norm.

But some seem to be calling this the long foretold big one
https://www.democraticunderground.com/?com=view_post&forum=1116&pid=93601

I replied with a little market history -- first, we've seen worse and made it. And then what's happened since Obama began forming his transition team, which is mentioned as something like the beginning of the bad happenings or whatever --

We've had worse since WWII: To take the 3 worst ones:

Max ...........Time to
pullback ... recover..... Crash Name

48.4%     7.5 years,     73-74
49.1%     7.2 years,     DotCom
56.8%     5.5 years,     Housing Bubble

The max pullback is the percentage drop from the pre-crash peak to the lowest point ("peak to trough" )

The time to recover is the time from the pre-crash peak to when it reached that same level again.

The total U.S. stock market, as measured by the Vanguard Total (U.S.) Stock Market Index Fund (VTSAX)
has grown 5.13 fold since November 3, 2008 (includes reinvested distributions) to June 29, 2022 close, a 12.72% average annualized return during these 13.65 years.

https://finance.yahoo.com/quote/VTSAX/history

(the June 30 close wasn't in yet as I wrote that)

For a longer view --
http://pages.stern.nyu.edu/~adamodar/New_Home_Page/datafile/histretSP.html

Thanks for posting.

That shows very powerfully the value of staying invested. It's also important, when looking at the numbers and statistics for the 1930s, to remember that the stock market was in a huge bubble in the lead up to the Crash, in no small part because of two things: manipulation by some large investors, and that many people were buying on "margin", putting up as little as 10% of the price of a stock and essentially taking a loan for the other 90%. Once stock prices started falling, they were seriously under water, similar to many people in the housing bubble.

These days the entire market is just far to big to be manipulated in any meaningful way. So when I see claims of that here on DU I know the person saying that just hasn't a clue.