Once the stock market finally finds its bottom during a bear market, the ride up looks a lot like the ride down — turbulent. .
Once the stock market finally finds its bottom during a bear market, the ride up looks a lot like the ride down — turbulent.
Some of the biggest moves are in the month before and after the trough, making it difficult for investors to time the market. In the past 50 years, the S&P 500 has gained an average 11 percent in the month after a bear-market trough, nearly half its average 23 percent gain during the six months after the low, according to Goldman Sachs strategist David Kostin.
This suggests “investors who have suffered on the way down can ill afford to miss the turn,” he says.
Historically, the S&P 500 has also suffered sharp sell-offs in the month heading into a bottom, a negative 10 percent, nearly a mirror image of the one-month rebound.
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Going out six months, the mirror remains: The index has lost 22 percent in the six months heading into the trough and gained 23 percent in the six months after.