“Declines set the stage for future growth, which often happens faster than anyone expects.”
Brad McMillan, chief investment officer for Commonwealth Financial Network, commenting about a volatile stock market. The S&P 500 entered bear market territory — or a decline of 20% off its recent high.
jun 14, 2022
- A decline of 20% or more is *often* viewed as an index (the Dow, Nasdaq, S&P 500) entering "bear market" territory.
- Why It Matters: A decline of 20% means the prices of a variety of stocks (equity in companies) have fallen drastically from higher numbers, often due to concerns about the market overall rather than just company-specific issues.
- The S&P 500 matters because it represents a broad selection of 500 large companies (such as Amazon and Apple); when this index slips, it signifies broader market weakness.
- Great explanation: Why use a bear to represent a market slump? Bears hibernate, so bears represent a market that’s retreating, said Sam Stovall, chief investment strategist at CFRA. In contrast, Wall Street’s nickname for a surging stock market is a bull market, because bulls charge, Stovall said. (CBS/AP)