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Data: FactSet; Chart: Axios Visuals

The longest bull market of all time is over — so, what now? That's the question facing millions of individual investors in the U.S. and around the world.

The bottom line: How worried you should be depends entirely on your time horizon, and when you might need to start spending the money y0u have saved up in the market.

Investors are experiencing unprecedented volatility — as of Wednesday, we've now had eight consecutive days with the S&P 500 moving more than 4%, easily breaking the old 1929 record of six days. The S&P 500 moved more than 9% on three successive days on Thursday, Friday and Monday.

  • That's a clear sign that Wall Street has no idea how to price assets right now. (Movements in other markets, like oil futures and corporate bonds, are similarly wild.) If the professionals are flailing, it makes sense that individual investors would also be confused and concerned.

Between the lines: For long-term investors, stocks are starting to look attractively priced for the first time in a while.

  • The world is going to recover from the pandemic. When it does, there will be winners and losers in the market. But corporate America as a whole is likely to remain a highly profitable enterprise. The value of the stock market is always a function of future earnings, so even companies that suffered greatly in 2020 might be worth a lot of money in 2025.
  • Long-term investors should expect to see years like this. The stock market has fallen more than 20% a little over once per decade on average, and the average peak-to-trough has been 33%. The current drawdown has happened particularly fast, but its magnitude is not unusual for a bear market — the S&P 500 fell 48% in 1973, 49% in 2001, and 47% in 2008.
  • If you're putting money into your 401(k) every month, then this decline is good news for you: It's like a 30% off sale on all those future profits. Declines like this are where the likes of Warren Buffett make their fortunes.
  • Even companies that go bankrupt aren't total losses. If you have a diversified portfolio including corporate bonds, then in bankruptcy some of those bond holdings might end up converting to shareholdings.

For individuals who will need cash in the next year or two, the current situation is much more worrying.

  • There's no indication that the volatility we're seeing is going away, and the downside is bigger than the upside.
  • If you need money to live on in your retirement, or because you've just been laid off, or because you want to put a downpayment on a house, then holding substantial savings in the stock market can end up vaporizing wealth you really need.
  • Thanks to the stock market decline, you now have a smaller percentage of your net worth in stocks than you have had for a while. But if you're looking at savings you're going to need to spend and that you can't afford to lose, then having any money at all in stocks could well be too risky for you right now.

Go deeper

14 mins ago - World

Former spy Steele defends controversial Trump Russia dossier

Former U.K. intelligence officer Christopher Steele arrives at the High Court in London in July 2020. Photo: Tolga Akmen/AFP via Getty Images

The author of the "Steele Dossier," containing unverified claims about former President Trump told ABC News he stands by his controversial report, according to excerpts from an upcoming documentary published Sunday.

Why it matters: Former U.K. intelligence officer Christopher Steele's dossier was used as part of former special counsel Robert Mueller's investigation into the Trump campaign's alleged links to Russia's government.

Ina Fried, author of Login
4 hours ago - Technology

Intel CEO sees making own chips as a matter of national security

Pat Gelsinger. Photo: Axios on HBO

Intel CEO Pat Gelsinger is putting the pressure on the U.S. government to help subsidize chip manufacturing, insisting the current reliance on plants in Taiwan and Korea as "geopolitically unstable."

Why it matters: There is bipartisan support for funding the domestic semiconductor industry, but Congress has yet to sign the check. The Senate has passed the CHIPS Act that includes $52 billion in semiconductor investment, but it has yet to pass the House.

Updated 4 hours ago - World

17 U.S. and Canadian missionaries kidnapped in Haiti

Haitian soldiers guard the public prosecutor's office in Port-au-Prince this month. Photo: Richard Pierrin/AFP via Getty Images

Children are among a group of 17 missionaries kidnapped in Port-au-Prince, Haiti, per a statement from Christian Aid Ministries Sunday.

The latest: "The group of 16 U.S citizens and one Canadian citizen includes five men, seven women, and five children," the Ohio-based group said. Haitian police inspector Frantz Champagne on Sunday identified the 400 Mawozo gang as the group responsible, in a statement to AP.

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