Bear Markets Are Transitory

With inflation falling, it’s looking more likely that we could see a soft landing in the U.S. economy.¹

So now all of the economic pundits are fighting over who gets to take credit for it.

My stance is no one gets to take credit, because everyone was predicting a recession and there are no counterfactuals.

You can’t say inflation was transitory, because the Fed hiked rates so aggressively. But, I’m not going to give the Fed all of the credit, because the unemployment rate didn’t rise, which was their goal with the rate hikes. Plus, they almost caused a banking crisis. No one wins, which is probably always the case with economic predictions.

There is one thing we can say was transitory—the bear market. This might seem like I’m stating the obvious, because every bear market in history has been transitory.

I’m not usually a fan of taking a bullish or bearish stance on the stock market. The way you look at risk should be colored by where you are in your investing life cycle. Extended bear markets can be risky for retirees who rely on their portfolios to fund their lifestyles. But, bear markets are wonderful opportunities for young people who are saving money on a regular basis with time horizons measured in decades.

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