One year ago tomorrow — March 23, 2020 — the market's coronavirus crash hit bottom. No one knew it at the time.
Here's an early morning report from the following day, via Value Line:
After closing out their worst week since 2008, stocks were down again Monday, as fear of the economic fallout from the Covid-19 pandemic tightened its grip on the markets.
There was a slight respite early in the day, after the Federal Reserve announced its latest moves to support the economy. These include removing its limits on repurchases of Treasuries and mortgage-backed securities, buying exchange-traded funds (ETFs) that track corporate bonds, and $300 billion in new lending programs to help support the financial markets, businesses, and consumers. However, the boost to the market was short lived....
[T]he Dow Jones Industrials ended the session down 582 points, or 3%, marking a 37% decline from its recent peak.... Most of the major market sectors were firmly in the red, with the heaviest losses coming in utilities (down 5.5%), financials (-4.8%), and industrials (-4.2%). Altogether, declining issues outpaced advancers by a better than three to one margin.
March 24, the same day that worrisome and downbeat report was published, proved to be the best single day for stocks since 1933.
The Dow Industrials took off like a rocket, gaining 11.4%, the S&P 500 surged 9.4%, and the NASDAQ posted an 8.1% gain. The shortest bear market in history was over, and a new bull market was underway — although, again, no one knew it at the time, or at least no one could be sure.
A year later, here's what we do know: The Dow and the S&P are up more than 75% over the past 12 months (through Friday's close), while the NASDAQ is up more than 90%. Not too shabby.
Wouldn't it be great if we had known then what we know now? Yeah, right. Of course, these things aren't predictable. You can't know in advance.
But you can know that the long-term trend of the market is upward and that bear markets come to an end eventually. And you can invest accordingly.
I'm reminded of something Mark Biller wrote a little while back:
[A] short-term emotional response almost always undermines the long-term appreciation of one’s portfolio.
If your investing time frame is more than five years — which it should be for you to be in the stock market at all — there's a strong likelihood (if history is any guide) that the dollars you invest today will appreciate by the time you need to take them out.
The longer your time frame, the more the odds are in your favor. As the old saying goes, "It's time in the market, not timing of the market, that makes the difference."
Who knows what tomorrow will bring? Not you, not me, not even the "experts."
But if you do your best to stay "above the fray" of the market's manifold gyrations and stick to your investing plan, you likely will come out ahead.
No, that's not a prediction. It's just a reasonable assessment of a strong probability.