After over a 25% fall for the S&P 500 index, getting bearish now begs the question, “what do you hope to avoid now?” The NASDAQ has been down over 30%, “what do you now expect to avoid?” The opposite is a better question, “with stocks down hard, have risks largely been taken out of prices?” Yes, there is always room to go down further, but that could simply be miniscule compared to the opportunity.

Did you know that after a correction and a recession, returns are typically up dramatically? Here are the averages:

1 year – 21%
3 years – 50%
5 years – 100%

So, it is now time to position for recovery. No one knows the exact timing for such a move, but after big declines, the odds support being positive, not negative. Risks are greatly diminished. Stay steady my friends.

The Lonely Bull