For 35 years I’ve written of the capital markets as TGH—The Great Humiliator. It wants to humiliate me, you and as many people as possible for as much money as possible, for as long as possible. It always does, has and never gives up. Your goal is to engage The Great Humiliator while not letting it humiliate you, or not humiliate you too badly. Today its best tactic is scaring you away from the coming rebound. Don’t let it.
This stock market downturn is flirting with the -20% threshold commonly separating corrections from bear markets. More declines could come—maybe a lot, if it is a full-fledged bear market. That is the bad news. The good news: If this is a correction, it is a very long one—so the end is relatively close by. But it’s similar if a bear market. Their back halves in duration are very steep but also very brief. Once halfway down in magnitude, it’s not long, a few months, until the rebound. The lone exception: 1929–1932, and nothing about today is like then.
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