2022, a year of fear for investors

Some investors did not have the crisis of 2008, nor that of the techno bubble at the beginning of the century. They do not have the experience – painful for portfolios – of value destruction and deadweight losses. They have not necessarily integrated the fact that a stock market cycle consists of alternating bullish phases with bearish phases.

Of course, everyone is anxious for the end of the downward trend. Meanwhile, the question on everyone’s lips is this: when will the markets return to solid growth?

In the last 120 years, there have been 14 bear markets, he observes Consulpedia. These periods have caused the markets to fall by an average of 33% between their peak and their low.

Among these different phases, it is the crisis of 2008 that most resembles the period we live in today. The markets saw their growth abruptly halted, before attempting a rebound…unsuccessfully. The next decline will confirm that we are in the presence of a recession.

It will then be necessary to be vigilant for signs of an upward reversal, which will result in alternate phases of growth and decrease while waiting to find a balance of growth.

While waiting for a return to a bull market, investors need to be disciplined… despite the stress, even the panic. They see the value of their investments erode, and are tempted to react to give the impression of taking control of the situation.

However, this control is above all to maintain their investment discipline. It is this mastery that prevents them from taking their losses by selling at the lowest level. I must remember that a bottom can only be followed by a growth, by definition. The most difficult thing is to wait for this return to the upside.

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