Recoveries

I saw this interesting blog from Disciplined Investing. It explains that much of the positive returns following a bear market, come in the first year. This helps to reinforce our point that it is important to stick with your asset allocation and keep money in the equity markets. In order to participate in the next uptrend in stocks, you need to be there. If you wait too long to get back in, your returns will diminish. This study is very timely given that we have come off a sizable upward move in the stock market. We are not sure whether the bear market is over, but we do know that we want to be there when the next bull market begins.

http://disciplinedinvesting.blogspot.com/2008/11/bear-market-recoveries-returns-occur.html