Markets have been weak in the US and other countries amongst a backdrop of distressing headlines, which is causing stress and worry for investors. Rapid  interest rate increases, softening real estate markets, gyrating commodity prices, and unpredictable rising oil and gas prices are all factors that have some investors wondering if they should revisit or change their investment portfolios.

A question we get more often during challenging markets is whether one should just get out of the market and wait for things to recover. The reality is that successful market timing is not just hard to do, but impossible in practical terms.

Further complicating matters, for investors to even attempt successfully timing the market, they must make the call to buy or sell stocks correctly not just once or twice, but again and again. 

Warren Buffet once said that the stock market is a mechanism to transfer wealth from the impatient to the patient. We never try to time the market – instead we seek to own great businesses with excellent management teams and track records of rewarding shareholders.  

At the time of this writing, the US has entered a bear market, measured by the somewhat arbitrary technical definition of a 20% peak-to-trough drawdown. This is now the 13th bear market decline since the Second World War, an occurrence of roughly once every six years.  

While investors may have some anxiety, in looking at the numbers, there is nothing remarkable about the severity or the duration of this particular bear market. The S&P 500 is currently off 23.50% from its highs, and the duration of its decline is currently the ninth longest bear market of the past 80 years or so, at 163 days. The median decline for this particular bear is -28%, lasting 240 days.

We don’t know if the short-term economic news will get better, or get worse. We don’t know if prices will go higher or lower in the next six months. More importantly, we cannot assume that even if the economic news gets worse that prices will decline further. Markets tend to be forward looking and can often overcorrect. It's quite possible that prices are already reflecting investor concerns of more trouble ahead and may actually rise despite more gloomy business reports in the days and months to come. We can't say what the future holds, but we can say that the current decline is similar in scope to other downturns of the market in the past. We can’t accurately predict when an upturn will begin.  

But the one thing we do know is that market economies have demonstrated their resilience on many occasions in the past and we are confident they will demonstrate their ability to do so in the future. In other words, we expect that long-term patient investors will be rewarded for staying invested. 

This might be cold comfort, but the data from previous market declines shows there are silver linings to be had here; historically there have been significant rebounds after steep declines in the stock market, which have bolstered investors’ financial plans.