Why Bear Markets Are a Necessary Evil
Nobody likes seeing their portfolio's value drop. That defeats the purpose of investing. Unfortunately, this has been the case for many investors in 2022, as the stock market has been in a bear market since June of this year.
A bear market happens when one of the major indexes (usually the S&P 500) falls by 20% or more from recent highs. And that's exactly what we've experienced. Since the beginning of 2022, the S&P 500 is down over 24%, the Nasdaq Composite Index is down over 32%, and the Dow Jones Industrial Average is down close to 20% (as of Oct. 8). So, to put it lightly, it's been a rough year.
However, it isn't all gray clouds for investors. In fact, bear markets are actually a necessary evil. That may sound backwards, but hear me out.
Source Fool.com
