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By Clint Gharib

As so often is the case, history provides some valuable perspective and possible lessons. I’ve been advising clients for over 36 years and have lived through two of the worst bear markets and two of the biggest bull markets ever. I find it interesting that scars from bad experiences seem to leave deeper marks on our psyche than positive ones. Maybe this is why so many repeatedly make the mistake of thinking the next bear market will be like the last one, which has not been the case so far since they started tracking the S&P 500.  Since the US market bottomed after the 2008 financial crisis, an ever-growing crowd of “market prognosticators” has warned at any hint of even the slightest trouble that a 2008 doomsday is around the corner.  Since 2009, there have been continuous warnings of the next crash.

‘Even a broken clock is right twice a day’  

Remember in 2010, there was a 16% correction market intraday lows.  During the Euro debt crisis of 2011, meltdown S&P 500 lost roughly 17% and there were numerous headlines saying that it could be worse than 2008 crisis.  Recall the 2013 bond selloff (a.k.a. taper tantrum) when bond traders panicked from Ben Bernanke’s speech that “the Fed was going to stop buying bonds since the US was stronger now.”  In that Market Update, I said: “analysts were misreading Mr. Bernanke’s message and acting like he was going to sell bonds rather than just stop buying them.”  The month-long double-digit selloff in 2014 produced daily headlines in the financial press asking if it was the start of next ’08-like crash.  Jump to Q1 2016, when US stocks again sold off fast and furiously during the first 5 weeks of the year after the December 2015 rate hike of 0.25% saw double-digit declines fearing the fed was going to raise rates four times, yet only did one time in December of 0.25%.  During Q4 2018, the S&P 500 dropped 19.7% from its peak.  Post-Covid, we saw a 25% decline in 2022.  All of these I mention dropped on fear, not necessarily on fundamental data.  Each of them had its own overriding flavor but all of them shared 3 fears: rising inflation, interest rate changes and geopolitical tension.  All of these were bear market corrections within a Bull Market Trend.

‘History doesn’t repeat itself, but it often rhymes’

Fear (sentiment) drove the crowd and could not be calmed by positive data nor analysts’ comments.  Georgetown University Finance Professor, Reena Aggarwal called it a crisis of confidence.  In hindsight, each time it was an emotional overreaction.  As we enter 2026, I fully expect a profit-taking decline. History has shown us bear market corrections generally occur within Bull Market Trends, but like I’ve discussed, do not let sentiment dictate financial decisions. I believe we are in a new Bull Market Trend.

The S&P 500 Index is a widely recognized index including a representative sample of 500 leading companies in leading sectors of the U.S. economy. Indexes are unmanaged. Investors cannot invest directly into indexes. Past performance does not guarantee future results.  All historical market data referenced above was obtained from S&P Global (www.spglobal.com) 

Opinions expressed are that of the author and are not endorsed by the named broker/dealer or its affiliates.  All information herein has been prepared solely for informational purposes and should not be considered legal or tax advice.  It is not an offer to buy, sell, or a solicitation of an offer to buy or sell any security or instrument to participate in any particular trading strategy and is not intended to provide, & should not be relied on for, tax, legal or accounting advice. You should consult your own tax professional regarding your specific situation. Past performance does not guarantee future results. Certain statements contained within are forward-looking statements including, but not limited to, statements that are predictions of future events, trends, plans or objectives.  Undue reliance should not be placed on such statements because, by their nature, they are subject to known and unknown risks and uncertainties. Oxford Retirement Advisors is an independent firm with Securities and Advisory services offered through Madison Avenue Securities, LLC (“MAS”), member FINRA/SIPC and a Registered Investment Advisor.  Oxford Retirement Advisors and MAS are not affiliated entities.

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