Monday, 25 January 2010

Investors can't avoid corrections and bear markets

Investors can't avoid corrections and bear markets any more than northerners can avoid snowstorms. 
In 50 years of owning stocks, you can expect
  • 25 corrections, of which
  • 8 or 9 will turn into bears.
You can expect 1 correction every 2 years, on average.

You can expect 1 bear every 6 years, on average, that is, every 3 corrections turned into bear markets.

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