Red-hot inflation and rising interest rates have led to recession fears, causing the stock market to fall sharply. In fact, the S&P 500 had its worst first half in more than five decades this year, while the Nasdaq Composite suffered its sharpest downturn since the Great Recession, and both indexes have fallen into a bear market. Those events have destroyed trillions of dollars in wealth, leaving a sizable dent in many portfolios.

Nevertheless, investors can find comfort in cold, hard facts. Both indexes have been through dozens of bear markets in the past, but all of them have ended in a new bull market, and there is no reason to expect a different outcome this time. Better yet, bull markets have historically created far more value than bear markets have destroyed.

Unfortunately, predicting market cycles is impossible, but each day brings the next bull market a little closer, so investors should be preparing their portfolios now. This advice from Warren Buffett and Peter Lynch can help.

Continue reading

Source Fool.com