Trading apps such as Robinhood Markets Inc. introduced millions of investors to the stock market during the pandemic, and many of them are experiencing a bear market for the first time. I suspect they have already learned some valuable lessons, notably that picking stocks is much more difficult in a down market. I’m reminded of others I learned as a business student and later experienced during my first bear market, the long and painful dot-com bust from 2000 to 2002.
Foremost among them is that although it’s reasonable to expect the market to rise over time, no one knows what it will do in the short term. Naturally, people want guidance during a downturn; they want to know when their investment accounts will stop shrinking. The financial industry knows this, so it parades out its prognosticators to tell the public how low stocks will go and how long the bear market will last.