New year, new bull market…hopefully.
of S&P 500 — index of stock It is often used as a benchmark to measure the overall performance of US equities. The S&P 500 Is Official became one in June.
It is now 2023 and Stock Market Still StrugglingBut what exactly does it take to end a bear market?
Ryan Detrick, chief market strategist at Carson Group, said: “No one rings the bell low, and no one rings the bell high.”
But here’s what investors should know:
What does it take to end a bear market?
A bear market is generally considered to have occurred when a stock or composite index (such as the S&P 500) falls by at least 20% from its recent high. The opposite is a bull market, where the price rises at least 20% from the bear market low.
To determine how stocks are performing overall, experts tend to look at three major indices: the S&P 500, the Dow Jones Industrial Average, and the Nasdaq Composite. Detrick analyzed Money’s market data to determine what levels each index had to reach for the bear market to be considered over.
The Dow bottomed out on September 30th, 2022 and actually exited the bear market on November 30th.
According to Detrick, the S&P 500 most recently closed at 3,577.03 points on October 12, 2022. Wednesday’s market close was 3,928.85.
Meanwhile, the tech-heavy Nasdaq Composite hit a new close on December 28 at 10,213.29. A 20% increase would be 12,255.95. Wednesday’s market close was 10,957.11.
Should you wait for the bull market to invest?
It may be tempting to wait until stocks resume investing, but doing so miss the chance.
“If you’re just waiting for this magical 20% level, you’ve missed 20% of the rally,” says Detrick.
Instead of trying to time the market, financial advisors tend to recommend strategies such as: dollar cost averagingFor that, you need to invest a certain amount regularly, say $100 every month.
That way you can take advantage of the eventual recovery without needing to know exactly when to enter or exit the market. This is very difficult even for Wall Street experts.