Markets

Bull vs Bear: How Good Are You?

Pop quiz!

For a bear market to begin, do stock prices have to fall by 10%, 15%, or 20% from a recent high? Do you know the answer off the top of your head?

If you said 20%, you’re right!(1) Drops of 10% to 19.9% are market corrections, whereas a new bull market starts when prices rise at least 20% from a recent low.(1)

That’s just one fact about bear versus bull markets. How many more do you know?

Test your knowledge with the bear versus bull market quiz in this month’s Visual Insights Newsletter.

Click here to see it!

The more you know about bear and bull markets, the easier it can be to keep a level head and a long-term outlook when big changes shake things up.

So, how much do you know? What surprising new fact could you discover? There’s only one way to find out… Go ahead and click here to take a 2-minute quiz on the basics of bear versus bull markets.

∞

Difficult Times, Hope Persists

Hard times are here. (I’m still optimistic, though; I'll explain why at the end.)

People are dying, running for their lives, and watching everything they’ve worked for go up in literal flames. And, because of technology, we’ve got a front-row seat in real time.

Energy prices are spiking, markets are volatile. Oh yeah, there’s still a pandemic.

On top of whatever personal stuff we have going on, that might pale next to the suffering of war but is still our burden to carry.

Sometimes, it’s just one thing after another and everything all at once.

What do we do? How do we deal with it?

I think it depends on the day. Some days, we’re overwhelmed and struggle to make progress. Other days we press on and focus on putting one foot in front of the other.

Some of us look to our faith for guidance. We also remember that humans are resilient creatures who have survived and thrived through some terrible times.

We remember that we’re not alone.

Ukraine: What's Next?

Some perspective on the grim situation in Ukraine and what could happen in markets.

(Need a break from it? Scroll down to the P.S.)

The invasion of Ukraine is a serious and scary escalation in tensions between Russia, Europe, and the United States.

Before we dive in to what it could mean, let's take a moment to think about the many folks who are suffering and dying as well as the ordinary Russians who will suffer from sanctions, instability, and economic damage. I hope and pray that diplomacy can end this crisis for all our sakes.

Let's talk about some possible implications for markets and our economy.

Given Ukraine's critical pipelines and Western sanctions on Russia, the crisis may lead to higher energy prices, which will trickle down to higher pump and heating fuel costs.(1) Sustained price increases could hamper the Federal Reserve's effort to control inflation, so we're keeping an eye on that as well.

What could happen in markets? Higher than average volatility, as we've already experienced, is very likely. Another correction (or even a bear market) is definitely possible.

What does history teach us about market reactions to geopolitical shocks?

A Wild Ride

Markets cratered this week, heading into correction territory, and then bounced right back.1 And then continued bucking and kicking the next day. Weird, right?

Not really. These things happen pretty regularly when investors get jittery. Let’s talk about what’s going on. (Scroll to the end if you just want my soothing takeaways.)

What led to the giant selloff?

A few things: Fears around the Federal Reserve raising interest rates and what rapidly removing support could do to markets and the economy. (2) Inflation worries (it's at a 40-year high). (3) Tech earnings. (4) A potential hot war in Ukraine. (5)

Bottom line: markets are being driven by fear, anxiety, and uncertainty.