Bear or Bull-Does it Matter?

Saw this excellent article today in WSJ by Jason Zweig on the uselessness of the bear market term. It is mostly a conjured up phrase and has no meaning to long term investors. I keep a copy of The Cycle of Market Emotions in my office and it always serves to remind me how slippery the slope is from anxiety to fear to panic. All the while we convince ourselves that ,despite the permanent uptrend of the market, it is somehow different this time. The famed teacher/author Benjamin Graham referred to the market as an untreated manic-depressive- sometimes up and sometimes down. That is the nature of markets and ultimately the reason long term premium returns exist. If markets were calm and inviting, no such returns could be commanded. The S&P 500 has posted positive returns in 7 of the past 10 years, a timeframe often called “the lost decade”. The average intra-year decline is about 17% . Over the past decade, the largest intra-year decline in an overall positive return year was -28% in 2009 ( the S&P 500 posted a 23% return for that year). Purposeful investing allows us to fix our gaze beyond the day to day mania in the markets . We let the markets work for us and we don’t work against them.