Having a playbook to follow can be very helpful during bear markets. It helped us here in the LPL Research department in 2008–09, and we think it can be helpful for the current situation. We all want to know the answers to the toughest questions, such as, how much further might stocks fall?  Are we in a recession in the United States?  Also, how long will the crisis last?  These are extremely difficult questions to answer.

Step #1: Follow Your Plan

Our playbook for this bear market, which has some similarities to the version we used in 2008–09, starts with suitable investors having and following yo

The Federal Reserve (Fed) surprised markets over the weekend by holding its March 17-scheduled meeting a few days early and introducing a wide range of provisions. Those provisions are intended to add liquidity, increase credit availability, lower the cost of borrowing, and eventually support the economy’s recovery from the impact of COVID-19.

Usually, Fed actions are fundamentally about setting the level of interest rates, and the Fed certainly made a statement there. As shown in our LPL Chart of the Day, the Fed lowered its policy rate a full 1% to a range of 0 – 0.25%, the first time the Fed has made a move that la

The longest bull market ever ended this week as the COVID‐19 (coronavirus) outbreak continued to spread and containment efforts further disrupted the US and global economies. US stocks fell 27% from the February 19 closing high through the March 12 closing low, based on the S&P 500 Index, marking the fastest 20% decline from a record high in history. US stocks were down between 8% and 10% for the week despite Friday’s rally amid optimism around additional response from policymakers in addition to aggressive actions from global central banks.

No equity index was spared in the downdraft, but it is notable that the large

The S&P 500 Index’s historic slide continued yesterday, culminating in nearly a 10% loss for the day, and leaving the benchmark index officially in bear market territory, just 16 trading days after setting a record high on February 19. In addition, the S&P 500 has now moved more than 4% each day this week, leaving investors and professionals alike wondering when this volatility could end. While nobody knows for sure, one thing we always look for at market bottoms are signs of extremes, both from a sentiment and price perspective.

From an anecdotal sentiment perspective, certainly fears of COVID-19 have reached the m