So where are we today? Truthfully, no one knows if this is the next Bear or not.  But to further illustrate what may happen, let’s overlay the last two Bear markets with the current market action:

Days in Bear Market

Source: Bloomberg, Beaumont Capital Management (BCM). 2000-2002 Bear market dates between 3/24/2000-10/9/2002. 2007-2009 Bear market dates between 10/9/2007 and 3/9/2009.

Of course, every Bear is slightly different but the first 10% drawdowns look mighty similar. And the circles around the capitulation selling are quite obvious.

If this current correction is going to continue, then where are we on the Bear market continuum? We have already lost the first quarter making up the ordinary pullback. It is the beginning of the second quarter. What are you going to do? Freeze or take action? Put another way, it is January 3rd, 2008. If you could go back in time, what would you have done differently?

If you are still fighting indecision, perhaps BCM can help. What if this is the mother of all head fakes? To BCM, it is simple: Follow a rules-based system that is designed to remove emotion. We provide growth systems designed to prevent large, devastating losses. Our systems ebb and flow as the market action unfolds, but without fear and greed clouding decisions, the path suddenly becomes crystal clear.

This article was contributed by Dave Haviland, Portfolio Manager at Beaumont Capital Management, a participant in the ETF Strategist Channel.

For more insights like these, visit BCM’s blog at blog.investbcm.com

Disclosures:

Copyright © 2018 Beaumont Financial Partners, LLC DBA Beaumont Capital Management (BCM). All rights reserved.

The views and opinions expressed throughout this paper are those of the author as of December 2018. The opinions and outlooks may change over time with changing market conditions or other relevant variables.

The information presented in this report is based on data obtained from third party sources. Although it is believed to be accurate, no representation or warranty is made as to its accuracy or completeness.

This material is provided for informational purposes only and does not in any sense constitute a solicitation or offer for the purchase or sale of securities nor should it be construed as investment advice. Past performance is no guarantee of future results. An investment cannot be made directly in an index.

“S&P 500 ®” is a registered trademark of Standard & Poor’s, Inc., a division of S&P Global Inc.

As with all investments, there are associated inherent risks including loss of principal. Stock markets, especially foreign markets, are volatile and can decline significantly in response to adverse issuer, political, regulatory, market, or economic developments. Sector investments concentrate in a particular industry, and the investments’ performance could depend heavily on the performance of that industry and be more volatile than the performance of less concentrated investment options. Foreign securities are subject to interest rate, currency exchange rate, economic, and political risks, all of which are magnified in emerging markets. The risks are particularly significant for ETFs that focus on a single country or region. The ETF may have additional volatility because it may be comprised significantly of assets in securities of a small number of individual issuers.

The portfolio manager maintains full discretion over the portfolio.

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