Investors are feeling pessimistic about the future, with high inflation, the Fed raising rates, war in Ukraine, and high energy prices contributing to a sense of doom and gloom. Although the current market is technically a bear market, with the index down by almost 24% after six months, we believe that it lacks the power for a long, drawn-out bear market like those we have seen in the past.

Bear markets typically last around nine months and experience an average decline of roughly 35%. However, we see underappreciated positives globally, such as positive yield curves, healthy loan growth among developed nations, solid earnings and revenue growth in Q1, and American households being in a strong position to weather inflation.

The market moves on the gap between expectations and reality, so as good news starts to emerge, the market will leave behind investors who are expecting a more catastrophic downturn. While equity markets can be unpredictable in the short term, we believe that well-positioned assets will benefit from better days ahead over the long term.

Nothing herein is intended to be investment advice. Investment in the stock market involves risk of loss, including the loss of principal. Past performance is no guarantee of future returns. The content contained in this article represents only the opinions and viewpoints of the Interlaken Advisors editorial staff.