Broker Check

When will it End?


By:  Aaron Anderson, CFP®, CFA, Partner & Financial Analyst

June 28, 2022


“When will it end?” That’s the question on everyone’s mind about the recent market unpleasantness. I’ll start with the correct answer, “No one knows for sure and anyone who says they do is lying.” However, using market history as a guide, we do think the end might be in sight.

I won’t rehash the fact that these market events are normal here; please read my last two newsletters, We Didn’t Start the Fire and This is Normal, for more about why that’s the case. The thing that makes this so difficult is that most of us aren’t used to it. It’s been such a long time since we’ve dealt with something like this that many have never experienced it and even those who did may have forgotten how it feels.

As you can see from the chart below, this bear market is already longer than any bear or “near bear” we’ve had since the Great Financial Crisis in 2008.[1] The one prior was the “Tech Wreck” around Y2K and then you have to go all the way back to the late 1970s and early 1980s to find bear markets lasting longer than this one.


Source: 7 Things To Know Now That The Bear Is Here | LPL Financial Research (

Short lived bear markets are scary at the time, but before things sink in, they’re over. For example, in 2020, we had a bear market worse than this one due to Covid fears. But the market started recovering in just over a month (then doubling from those lows in less than two years). There wasn’t time for dread to really take hold.

This one is a lot slower. We’ve had time to watch it fall, recover some, give up that recovery, and repeat that gut wrenching cycle. We’ve had time to see our account values fall over multiple statements and contemplate what that means – for long-term investors, it means very little and is a chance to buy investments “on sale”, although that’s hard to swallow while it’s happening.

Fortunately, we believe that we’re closer to the bottom than to the top at this point. Bull markets and bear markets don’t die of old age (as the saying goes), but as the bear market lasts longer, we start to expect and then ignore bad news as a coping mechanism. The market then usually starts to recover even if the worst isn’t over.

One positive sign to look out for, as it usually happens near market bottoms, is something called “capitulation” – when people finally throw in the towel and sell out. This might look like a huge down day where the S&P 500 index is down hundreds of points. Or, it could look like days of prolonged intense selling.

Interestingly, from June 8 – June 14, we had five such trading days in a row where the S&P 500 closed lower by at least 1% each day. This chart shows what tends to happen after four such days; green is my favorite color and that chart has a lot of green on it.


Source: 7 Things To Know Now That The Bear Is Here | LPL Financial Research (

Of the nine times that’s happened since 1950, the S&P 500 is higher for most of them six months later and for all of them one year later. Hopefully history will repeat itself.

So, when will it end? We don’t know for sure so the best we can do is continue doing what we’re doing. Timing the market in and out doesn’t work, so we continue to invest in things that we believe will weather the storm and do better in the recovery on the other side. If this is difficult for you, you’re not alone; please give us a call so we can talk.

Starting with this quarter, we’ve decided to pull back the curtain a little bit to discuss why we hold the stocks that we do. We’ll discuss some of our better performers, worse performers, new positions we bought, and positions we pulled the plug on for the previous quarter.

A few disclosures before we begin:

  • While we tend to use a similar investment mix across all accounts held with us, you may not hold some of these positions mentioned here – maybe they're not appropriate for your goals and risk tolerance or maybe you didn’t have funds available at the time and we didn’t want to sell any of your holdings to make some available.[2]
  • This is NOT a recommendation to buy or sell. It is an “after the fact” report giving the basis for previously made discretionary investment decisions. There is neither enough information given here to make an informed decision nor anywhere near the amount of analysis we do on our holdings or prospective holdings. You can of course assume that we have positive expectations for any of our holdings, otherwise we would have sold them. Beyond that, what is stated here is a backward-looking report at what occurred, not a forward-looking prediction of expectations.
  • We are long term investors and so what happens quarter to quarter is not something to focus on. Our best performer one quarter might be our worst performer the next, so again, you should not make investing decisions based on what’s discussed here.

Now that we’ve got that out of the way…

Better performers:

  • T: We started looking into AT&T when they announced a new CEO. His goal was to refocus on growth by shedding unprofitable business segments. Since then, they have sold DirecTV and recently spun off Warner Bros to merge with Discovery. While the stock has not moved in the direction we hoped in general, our plan was and still is to collect the high dividend while we wait for the stock to reflect his vision.
  • ENPH: This stock has been a great one for us. Enphase is a leading provider of solar equipment, specifically state of the art microinverters that are needed for generating solar power. We believe that there is a strong case that solar power will be one of the main ways forward for clean, renewable energy and that Enphase is well positioned to be a leader in that space.
  • JNJ: Johnson & Johnson was purchased as a balance to the portfolio with solid dividends and growth expectations. As with broader healthcare, we expect their services to be in demand as the population ages. While it wasn’t a great performer prior to the recent market selloff, it has held up well during the pullback providing some of the balance we bought it for.


  • BA: Boeing was our biggest problem holding before the pandemic. We’ve been in Boeing off and on through the years, but due to corporate hubris in dealing with the aftermath of the 737 Max crashes and decertification and perhaps in creating the problem in the first place, it’s struggled to takeoff.  We still own it because it’s one of only two major airliner manufacturers in the world (Airbus being the other), is important to both American aerospace and defense industries, and at some point we believe it will get its house in order.
  • MTTR: Matterport is a software/technology company that makes 3D, virtual reality recordings of indoor spaces with accurate measurements used in real estate, home renovations, etc. It initially did well, but turned around too quickly to sell when the market soured on high growth tech names. At this point, selling now would not generate enough investible capital to move the needle even if we picked the absolute best recovery stock so we continue to hold it.
  • OKTA: We purchased Okta (the company name is the ticker) as a pick in the cybersecurity space. They are a leading provider of sign-on solutions and security and have many important large clients such as Zoom, Major League Baseball, and T-Mobile, to name a few. Unfortunately, they too got caught in the crosshairs of people selling high tech growth stocks, but due to the importance of what they provide, we still believe in their long-term prospects.

New positions:

  • NTR: Nutrien is a Canadian company that provides complete agricultural solutions (nutrients, fertilizer, crop protection products, seeds, etc). They also provide potash (world’s largest producer), nitrogen, and phosphate for both their use in fertilizer and other industrial uses. The main driver behind owning this is defensive. With the breadbasket of Europe being under siege by Russia, the world needs to be fed and so this company stands to benefit from people trying to increase farm yields. It also gives us more international exposure but in a country with a more developed economy.
  • COST: Costco is a warehouse membership club with almost a cult following. People enjoy shopping there and gladly pay the membership fee for the privilege. We’ve followed Costco but always thought it was too expensive while watching it get even more so. This bear market has given us a second chance. While the stock has been beat up due to inflationary pressures along with other retailers like Walmart and Target, we believe their well-regarded shopping experience will allow them to weather any economic storms better than most other retailers.
  • DEA: Easterly Government Properties is a REIT (real estate investment trust) that trades under the ticker DEA because that’s the kind of tenant they serve – U.S. government agencies including the DEA and the FBI among others. This was purchased for income with growth expectations – we continue to avoid bonds but still need something that generates income as a portfolio balancer – and as a defensive holding if the economy does struggle as some expect. The specialization needed to outfit a building for government use makes it difficult for an agency to move and the government is unlikely to not be able to pay rent.

Sold positions:

  • STOR: We did well in Store Capital, but felt it may have run its course and wanted to buy DEA. To not be too overallocated in the REIT space, we used STOR as a source of funds.

[1] A bear market is typically defined as when an index is down at least 20% from all-time highs. When someone says we’re in a “bear market” in stocks, they typically mean that the S&P500 index is down at least that far (although one can have a bear market in other markets like tech stocks, bonds, housing etc). A near bear is when it is close to 20% down but didn’t officially make it there.

[2] I say “similar” because we customize portfolios based on differing goals, risk tolerances, and timing of transactions. So, the size of positions and account performance, both in absolute and relative terms, will be different.


Content in this material is for informational purposes only and not intended to provide specific advice for recommendations for any individual.  All performance referenced is historical and is no guarantee future results.  All indices are unmanaged and may not be invested into directly.

The Standard & Poor's 500 Index is a capitalization weighed index of 500 stocks designed to measure performance of the broad domestic economy through changes in the aggregate market value of 500 stocks representing all major industries. 

The economic forecasts set forth may not develop as predicted and there can be no guarantee that strategies promoted will be successful.

Stock investing includes risks, including fluctuating prices and loss of principal.