Happy Holidays!

Happy holidays from the Vodicka Group!

2022 has been a tough year for investors. Stocks and bonds are both down sharply. However, there is a silver lining.

Bear markets don’t last forever. And even though they are painful, they set the stage for bull markets that can last for years. History has shown this many times. Here are some more details from Yahoo Finance.

If there is anything to hang your hat on during the current bear market in stocks, it’s that longer term markets tend to rebound very nicely.

The S&P 500 has been higher three years later in eight out of nine cases in which the index has fallen 20% or more from an all-time high going back to 1957, according to research from Trust co-chief investment officer Keith Lerner. Stocks have returned on average 29% during those eight cases.

Interestingly, stocks have also sharply regained ground a year after falling 20% or more from a high. Lerner’s data shows the S&P 500 has increased 15% on average in the seven times stocks have tanked 20% or more from a high dating back to 1957.

                                                                                chart from yahoo finance

This study demonstrates that it has paid off to buy or hold stocks when they are down. I believe that same cycle is repeating itself right now. Its been a tough year to own stocks – but I think this weakness is setting the stage for a new bull market.

For the time being – enjoy the holidays! I’ll be back next week with a recap on 2022 and my forecast for 2023. Have a great day!


Michael Vodicka

Michael Vodicka is the president and founder of the Vodicka Group Inc., a licensed investment advisor (Series 65) and a financial journalist.