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Opinion
Nir Kaissar

Beware of a Bear Market That Is More Than a Cub

Many stock investors have never experienced the pain that a long downturn can inflict and may be mistaken that selloffs are always brief.

Which one will it be?

Which one will it be?

Photographer: Evening Standard/Hulton Archive/Getty Images

The US stock market is experiencing the worst start to a year in five decades. Technology stocks, long a favorite of investors, are collapsing. And yet investors don’t seem bothered. I count five bear or near-bear markets in my adult lifetime, and I don’t recall investors ever being this sanguine about a declining market.

One reason might be that, technically, this isn’t a bear market, which is generally defined as a decline of 20% or more from its most recent peak. The S&P 500 Index briefly dipped into bear territory on May 20 but rallied back by the end of the day. It’s down about 14% from its record high in January. So investors haven’t yet been bombarded with scary headlines that typically accompany a bear market.