![](http://lifeman.wpenginepowered.com/wp-content/uploads/2019/08/Bear-Image.png)
A bear market is when securities prices fall 20% or more from recent highs. This period of falling stock prices come from widespread pessimism and negative investor sentiment. This term “bear market” got its name from the way a bear attacks its prey, swiping its paws downward.
In December of 2018, we temporarily fell into a bear market as the S&P 500 dropped 20.18% from the 9/20/18 highs to the Christmas Eve lows. This was a painful three months that had many people fearing over the next stock market crash.
![](http://lifeman.wpenginepowered.com/wp-content/uploads/2019/08/SPY-18-Year-End.png)
Almost a year later, the S&P 500 is up 24.75%, not including dividends, since the “technical bear market”.
![](http://lifeman.wpenginepowered.com/wp-content/uploads/2019/08/SPY-YTD-19.png)
Although the S&P 500 has made steady moves back towards all-time highs, we are now seeing pockets of extreme pessimism. The traditional retailers are getting punished. See the retail carnage below in comparison to the S&P 500.
![](http://lifeman.wpenginepowered.com/wp-content/uploads/2019/08/Retail.png)
I say “pockets” because it clearly isn’t all doom and gloom with the overall market posting double-digit returns so far. You can also look at the chart below that shows the US Consumer is alive and well according to Walmart, +32%, and Amazon, +35%. Some would pose an argument, however, that Amazon is not even retail anymore.
![](http://lifeman.wpenginepowered.com/wp-content/uploads/2019/08/Walmart-and-Amazon.png)
We are seeing many conflicting signals. If we examine CNN’s Fear & Greed Index, we show that “Extreme Fear” is driving the market right now. This index is calculated using several factors that can be reviewed here.
![](http://lifeman.wpenginepowered.com/wp-content/uploads/2019/08/Fear-and-Greed-Index.png)
We can also see the returns of “safe haven assets”. Historically, Treasuries, +19.6%, and Gold, +17.26%, appreciate when there is market uncertainty and fear of decline. Bitcoin has gone bonkers this year, and some have made the argument that bitcoin will be a safe haven.
![](http://lifeman.wpenginepowered.com/wp-content/uploads/2019/08/Safe-Haven-Assets.png)
That is enough charts for today’s work. Remember to focus on what you can control.
Key Long-Term Investment Thinking:
- Stay diversified with your portfolio and practice dollar-cost averaging.
- Ignore television coverage of financial markets – They are not here for your specific situation
- Do not react emotionally to short term market moves
- Conduct regular cash-flow analyses to confirm your investment portfolio is still tracking within your financial plan
More to come.
*Athanassios Panagiotakopoulos is an Investment Advisor Representative with Dynamic Wealth Advisors dba Life Managed. All investment advisory services are offered through Dynamic Wealth Advisors.