This week, I’m talking about stock market crashes and the predictable emotional pattern that all crashes follow. If you know how to spot a stock market bottoming process, you’ll be better equipped to take advantage of the amazing opportunities that exist at and near the bottom. 

Yesterday, I laid out the emotions that define stock market bottoms - primarily: surrender, hopelessness, and depression. When the rest of the world is feeling hopeless, it feels like a terrible time to invest, but if you know what the bottom looks like and feels like, these emotions can help you take advantage of the abundance of opportunities at the bottom, or at the very least, help you keep your cool and stay invested during the dark days of market bottoms. 

Today I want to talk about the timing of the market bottoming process. And that’s the rub, because the market can pass through these various emotional stages very quickly or very slowly. As I mentioned earlier in the week, my spidey sense tells me that we’ve already passed through the panic stage of the market bottoming process, which in this most recent crisis, happened in mid-March. 

The largest single-point decline in the DJIA ever happened on March 16th when the market dropped nearly 3000 points and lost nearly 13% of it’s value in one day. In fact, 8 out of 10 of the largest point drops ever in the DJIA all happened between Feb 5th and April 1st of this year. While that makes sense because the Dow is also the highest point value it’s ever been, it’s notable that this period of panic selling all happened within a period of a couple months. 

The measure of fear and panic known as the VIX was approaching levels seen during the financial crisis, has since calmed down and dropped by more than half, which is a good indication that the panic has passed. 

So these emotions can last a few days, weeks, or even months. The bottoming process can be painfully long. It can also be strikingly short as well, making it all the more important to be watchful and pay attention to those opportunities during a market bottom.

Tomorrow, I’ll talk about 3 specific opportunities you can take advantage of during a market bottoming process. 

Thanks for listening. My name is Ashley Micciche and this is the One Minute Retirement Tip.

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