Investing in a bear market sure is exciting, isn’t it?
There was reason to be pessimistic about stock market returns. After all, a dollar invested six & a half years earlier was worth less than a dollar at the time.
It wasn’t easy, but I continued putting money into those mutual funds. I rode the wave down and by March of 2009, that SEP IRA was worth quite a bit less than the money I had put in.
In the steady, boring market, every month’s $10,000 investment buys 100 shares at $100 each. At the end of the year, your twelve $10,000 investments will be worth — you guessed it — $120,000.
A bear market is defined as a drop of at least 20%. This market drops a total of 40% over four months, stalls there for a third of the year, and climbs back to previous highs by the end of the year.