US stocks are a hair from all-time highs and over a decade has passed since the last global bear market. Yet amid the bounty, investors are glum. August's volatility sent bearish sentiment spiking in the US.[i] European confidence tanked. One survey showed German investor expectations hit all-time lows in July—only to tick lower in August.[ii] Fund outflows accelerated worldwide, continuing even after stocks resumed climbing.[iii]
That a brief -5.4%[iv] slide in global stocks sparked such angst hints at the vast torment a bear market—a prolonged, fundamentally driven decline of -20% or more—might bring. It highlights a key point: Recalling some general bear market traits now can shed light on the mindset you'll need to navigate future bears, regardless of portfolio positioning.
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