Thread by @Ally

Hi everyone! It’s Ally Invest Chief Investment Strategist Lindsey Bell (@justLBell), here to give you a quick thread on markets these days (because we’ve been watching markets for years, and we have some *thoughts*).

1/25

You might be exhausted (like I am), and for good reason. Between coronavirus, oil prices and navigating how to efficiently work from home, what’s an investor to do?

2/25

I’m gonna help you understand where we are now, what it all means and how you’ll emerge from this! We’ll start with the bad news first (we like to get that out of the way) and then highlight some bright spots. 🌟

3/25

Let’s dive in! You may have noticed, the market mood has changed from optimism to uncertainty. One investor sentiment gauge we watch is the $VIX, often known as the “fear index”. On Monday, the VIX jumped to its highest level since the financial crisis, closing at 82.

4/25

That’s got a little something to do with the stock market. Three of the 10 worst days for the S&P 500 since 1950 have happened in the past 2 weeks.

(@justLbell) 5/25

Those, and a few other steep declines, have led to the S&P 500 falling nearly 30% in 26 calendar days, its fastest fall into a bear market in recent memory.

6/25

FYI – a “bear market” is when stocks fall at least 20% from a 52-week high. It’s a rare event – there have been 12 bears since 1946 (about one every 6 years). We explain more here: ally.com/do-it-right/in…

7/25

But there's good news: Bear markets don't last forever and could present opportunities for some investors. I'll have more on that later.

(@justLbell) 8/25

What about the economy? There are signs of weakness emerging – retail sales, Empire State manufacturing, housing permits, for example.

9/25

Usually stocks are considered a “leading indicator” for the economy, so it’s safe to say investors aren’t feeling too confident about the outlook right now.

10/25

It is an unnerving environment, and it’s hard to predict what will happen in the weeks to come. Wall Street has struggled to quantify the impact of the #coronavirus outbreak, and more & more experts are pointing to an economic decline in coming quarters.

11/25

We do see a few glimmers of hope! The Federal Reserve has moved swiftly to lower interest rates twice, initiated other measured to ensure liquidity, and the White House backed a plan to get upwards of $1T directly to households/businesses. ally.com/do-it-right/tr…

12/25

For the Fed’s part, they are being proactive, giving the economy some cushion against what could happen down the road (instead of what’s happening now). Rate changes have been one of the Fed’s most powerful tools for combating economic weakness.

13/25

Fiscal stimulus measures are also emerging to help pad consumers’ wallets. Monetary policy, fiscal stimulus, & public health measures (#socialdistancing) working together could help keep coronavirus contained and get the economy moving. apnews.com/0f6c483ce758c5…

14/24

Stocks are swinging and the markets are unsettling, but for investors with horizons of five years or longer, this could be a huge opportunity.

(@justLbell) 15/24

Remember – we’re in a bear market, which means stocks have fallen significantly. In fact, this is the sixth-worst bear market we’ve seen since 1946. Shout-out to @StovallCFRA for the data help!

16/24

Bear markets are uncomfortable (and that’s putting it lightly), and they can take time to run their course. 🐻

In the past 11 bear markets, it’s taken the S&P 500 an average of 15 months to bottom, and 27 months for the index to completely recover its losses.

17/25

We’re not sure what will happen this time around. But history has shown us one thing -- if you’re a patient investor, you could be rewarded years down the road.

(@justLBell) 18/25

The S&P 500 has posted 7% annualized gains since 1946, even though it has weathered 12 bear markets in that period. Volatility is one aspect of investing, and stocks hit rough patches like these every so often.

19/25

Let’s talk #goals! It’s important to remember your investing goals in times of volatility. The future is uncertain, and market conditions may be tough to stomach, but it may be best to stay put.

20/25

While you can’t control financial markets, you can adjust your strategy accordingly.

21/25

Btw, that’s great #lifeadvice, too: focus on what you can control, not on what you can’t.

(@justLBell) 22/25

We know people have different time horizons and goals. If you have short-term cash needs, you may want to consider moving from stocks to safer assets.

23/25

No matter what happens next, we’ll continue to be your ally and help you navigate these turbulent times with confidence.

24/25

That’s all from me, @justLBell – reply with any questions you have!

(and legal asked me to post this before I go: ally.com/invest/disclos…)

25/25