Bears Are Normal

Since 1950, the S&P 500 has fallen into a bear market on average about every seven years. Future declines are normal enough to plan for, even though timing is unknowable. U.S. stocks have recovered from past major crashes, but past recovery is not a contract with the future. That is why diversification, cash reserves, and a risk level you can actually hold matter as much as optimism.

How fast can recovery come? The 2008 financial crisis erased 57% of the S&P 500's value. Yet five years later it had fully recovered and was hitting new highs. Crashes feel permanent. They never are.