The model for buying the dip was set in the summer of 1998

Why We Could Use a Good, Long Bear Market

Stocks have experienced only brief downturns over the past 16 years, creating dangerous complacency

A downturn like 2007-09 when U.S. stocks fell by more than half can be both awful and therapeutic. It took 66 months for the S&P 500 to regain its previous high. Investors with a long-term perspective pounced on what in hindsight were solid, boring bargains near the bottom.

The five brief downturns since then that met the unofficial definition of a bear market taught the opposite lesson. 

Momentarily terrifying, they encouraged investors to “buy the dip” quickly and recklessly—the junkier the stocks, the better.

The average time to reach the previous high when a bear market was accompanied by a recession was 81 months. Over the past 16 years, downturns have lasted less than eight months before the old high was reached.

The model for buying the dip was set in the summer of 1998, after Russia defaulted and hedge fund Long-Term Capital Management collapsed. 

The Federal Reserve stepped in and the effect was electric, sending stocks back to a new high by that November.

Spencer Jakab WSJ Nov. 17, 2025 

https://www.wsj.com/finance/stocks/why-we-could-use-a-good-long-bear-market-73997cb7

 

Fed put, Trump put, but don’t forget the C-suite put; Buybacks

https://englundmacro.blogspot.com/2025/03/fed-put-trump-put-but-dont-forget-c.html



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