This is part three of Capital Growths’ mini blog series exploring the current state of the American financial market, what it means for your financial health and how you can keep your finances afloat during the COVID-19 pandemic.
As you may have heard, we’ve entered the first bear market in 11 years.
A bear market is when a market experiences prolonged price declines. Bear markets occur when prices in a market decline by more than 20%, often accompanied by negative investor sentiment and declining economic prospects. The median bear lasts 18 months and inflicts a 30% loss. Bear markets may be contrasted with upward-trending bull markets, which we’ve been experiencing for quite some time.
The signs of a weak or slowing economy are typically low employment, low disposable income, weak productivity and a drop in business profits. In addition, any intervention by the government in the economy can also trigger a bear market. In our current case, all of these factors brought on by the Novel Coronavirus pushed us into a Bear Market.
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Risk Disclosure: Investing involves risk including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values. Past performance does not guarantee future results.
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