Is The Pandemic Bear Sleeping?

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Back on March 27th, I made the playful ‘Much To Early Prediction’ to friends (and in this POST) that the pandemic market crash had bottomed out.  The DJIA had fallen to 18,214 on the afternoon of March 23rd.

This was long before the worst of the pandemic had hit the US or the world yet, but so far the optimistic outlook has paid off as the DJIA has gained back more than half of its losses, currently sitting at 24.5K, down 17% from it’s February peak, but up 35% from the current bottom of this crash.

That said, I’m still among the minority of early retirees that think the worst is over so far.  Since my ‘Much To Early Prediction’ I have been following an earlyretirement.org thread asking if the market has bottomed yet.  I tallied the responses – starting in early-April and going up until today – and you’ll see that most of these folks are very negative on the outlook of the market:

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Despite the market’s strong recovery – and businesses reopening around the world – you can see that most of these folks continue to be quite negative with 49% of respondents believing that the market’s bottom is still coming.  The most recent responses (May) are as negative as the early responses (early-April).

These folks see the pandemic as a unique ‘black swan’ event that has risks that can’t be measured.  They believe that since the world’s most distinguished doctors & scientists can’t clearly assess the health risk, the financial markets are tipped to risk too.  One said, “Like the movie War Games, the only way to win is not to play.”

In my mind, while the risks are many, most businesses are figuring out how to stay productive amid the pandemic chaos.  I think that will prevent the market from dropping through the floor again.  The recovery may still be slow, but businesses will find a way – I think that’s what we are seeing today.

With respect to our portfolio, we continue to ‘hold tight’ for the longer-term.  I continue to hope that once this chapter is over, we will be on to our own ‘Roaring 20s’!

Has your optimism in the market changed since late March?

Image Credit: Pixabay

 

2 thoughts on “Is The Pandemic Bear Sleeping?

  1. Having now been through several iterations of the end of the world, I think mankind and the U.S. will find a way to make life work. There really isn’t an alternative any of us are willing to accept. So yeah, we will be fine, and the economy will waiver back and forth, but continue its long term trudge upaward as it always does. Stay long…it’s really the only smart bet. I believe in our ability to find every failure before finally finding the best solution, but we will eventually figure it out and flourish…we always do…

    So is the market low point behind us?…IMO it really doesn’t matter. I’ll just keep buying along the way…

    Liked by 1 person

    1. I like that thought – we will find “a way to make life work …” because “there really isn’t an alternative any of us are willing to accept.” That’s great. Also, I just noticed that the market is actually only down 3% from what it was valued at exactly a year ago.

      Like

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