Officially a bear market folks (in the Dow). Before you panic, it is worth taking a look at the historical data. A -20% decline happens every 3 or 4 years so it is not that unusual. The Dow ETF is DIA.
Since 1900:
There have been 31, now 32, declines of -20% or more in the Dow (it takes 3 years at 10% returns to get back to even)
There have been 17 declines of over -30% (4 years to even)
There have been 10 declines of over -40% (6 years)
There has been one decline of over -50% (8 years)
Now that the market is down -20% from the highs, the better question is: “How bad is it going to get”?
While not for everyone, a tactical approach certainly looks like the right choice right now (just like it always looks like the wrong choice in bull markets).
