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Is this a bear market?

29964 Views 502 Replies 39 Participants Last post by  james4beach
I know it's impossible to tell until well after the fact, but I'm wondering if we might be in an actual bear market now. Looking at VT for world stocks, it looks to me like a down-trend. I think the more worrying part is that the MSCI EAFE is falling sharply due to the war and worsening business conditions in Europe.

Normally one would say "don't worry, the Federal Reserve will juice the markets and rescue stocks any moment" but they should be raising rates soon.

Or maybe the Fed will now give up, and leave rates alone? It would really be "out of character" for the Fed to actually go ahead with ending QE, while stocks are declining. But if they actually go ahead with rate hikes and ending QE, I cannot see how stocks can possibly go up.

What I'm doing: sticking with my existing asset allocation plan. I'm still 31% stocks today, more or less on target. However I do have a strong Canadian equity bias, and they've been holding up very well so far.
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Have you, or anyone else, ever experienced 4 or 5 months going by and then you actually knew where we were headed. Ever?
John Bogle had a nice interview that I had found on Youtube. I'm too lazy to find the exact interview but I'll paraphrase what he said.

He said that in all his years in the industry, he has not met anyone who successfully timed the market (by which he means timing bear vs bull cycles). He said that he did get a bad feeling during the dot com bubble and reduced his equity allocation slightly, but that was the only time he successfully "timed" the market. He then admitted that earlier in his career, he had tried timing around bear markets -- but failed to guess correctly.
Have you, or anyone else, ever experienced 4 or 5 months going by and then you actually knew where we were headed. Ever?
I would say better idea? Yes
Know for sure? Never.

Many here pointed out that inflation had risen above the target rate in 2021 and the probable outcomes of letting inflation run high. Did they predict it with certainty? No. Were they able to use that data to make decisions about the future with probable outcomes to their benefit? Yes Could the outcome been different based on unknown future events? Absolutely!
It's kind of amazing how much the stock and bond markets have rebounded. Compared to the 2020 high just before the market crash,

VBAL is now 9.7% above that pre-covid peak,
VGRO is now 15.5% above that peak,
XAW is now 20% above that peak!

And my favourite investment, XIU is now 27% higher than its pre-covid peak... talk about the TSX 60 delivering results.

Really supports the argument for sticking to one's asset allocation plan.
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