Transcripts

"Money File"-History of Bears

SUSIE GHARIB: In tonight's "Money File," a short history lesson to help educate and calm nervous investors. Here's Gail Marks Jarvis, personal finance columnist at the "Chicago Tribune."

GAIL MARKS JARVIS, PERSONAL FINANCE COLUMNIST, CHICAGO TRIBUNE: You probably want the stock market to stop torturing you. One day it suggests you'll be fine with a 350-point rally. The next day it slaps you down. That's a bear market for you. Wild swings come with the territory. We've had 10 sharp swings since the bear market began last fall. Investors are starting to wonder if the pain will ever stop and if their portfolio will ever recover. So a little history might be reassuring. Over the last 100 years, there have been 22 bear markets or declines of 20 percent or more. (INAUDIBLE) great in a bull market and awful in a bear market. Investors are actually in bear market (INAUDIBLE) at the time. And each time we do recover what we've lost, maybe not in specific stocks, but definitely in the full stock market. On average, people are back to even about two years after a bear market. That's not always true. Some analysts are comparing this bear market to 1973, '74, a slump mixed with inflation. You should hope they are wrong. Then, investors did not recover until seven and a half years later. But even in that awful bear market, investors did recover and the '90s, eventually made us feel very good. So be assured, sunshine will return. I'm Gail Marks Jarvis.