My First Bear Market

For the younger docs, especially those who have not suffered through a bear market, I thought I would take myself back to the 2000-2002 bear market and how I felt when the stock market was seemingly crashing all around me. 

I was earning real doctor money, I felt urgent pressure to get my money into the stock market ASAP or I would surely miss out on the elixir that was making everyone else around me fabulously wealthy.

My First Bear Market

Arrow

The tech bubble peaked in March of 2000, and burst, followed 18 months later by 9/11, bringing down the largest, most heavily invested segments of the US stock market.

The Tech Bubble Bursts

There were some niche exceptions. I caught the small/value bug early and invested in this space via actively managed funds, and there were a few other small pockets of resilience in my portfolio (bonds and international stocks). 

As the two year bear market dragged on, it became disheartening to see the value of my portfolio tanking, even with regular retirement fund contributions and additions to a taxable account.

It felt like I was throwing money into a black hole. I did not capitulate and sell out of equities, but I did shift things around a bit, to better diversify my portfolio. Eventually, my interest in feeding the bear market beast was wavering.

At some point, I started diverting more funds into consumptions. I remember when asked by a senior partner what I was going to do with a semi-annual bonus check in 2002, I told him that I was going to “invest in fun.”

Investing in Fun Instead

For our anniversary, we bought each other expensive watches, something I probably would not do today. There was a pervasive feeling inside that this bear market thing was endless, so you might as well enjoy the fruits of your labor today.

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