As we move further into the New Year, most investors are still continuing to grapple with the fears that were brought on by the dramatic market downturn of 2008.

As these emotional times continue, while many financial expert are saying that they know when the market will turn around – no one really knows when the market will turn around, but there is one thing we do know – The market WILL turn around! It’s just a matter of time.

As a matter of fact, since the market’s huge decrease in 1929, there have been a number of bear markets, all of which have started new bull markets, as they have moved out of bear territory and back into bull territory.

Another interesting fact that also applies and has continually been referred to by technical analysts is that, when the market finally turns from the bear to the bull, from that point on to the market’s next run through the bull to the bear, the market has always responded with higher lows and higher highs.

The point here is if you are a long term investor and your portfolio holds reasonably good quality stocks don’t panic or allow overly emotional market noise to spook you into selling when you should probably be doing the exact opposite – either holding or buying. The bottom line is this, as one market pundit has suggested in the middle of many bear markets – We have been here before and we have always recovered and eventually enjoyed new periods of prosperity. The U. S. and world economies are resilient, and that has not changed.

Will the Government’s Stimulus Plan Work?

The answer here is: Probably. Historically, for example, in the 1973 to 1974 bear market, the S&P 500 Composite Index declined for 21 months and some wondered if we would ever recover.

In the early 1980s, short term interest rates exceeded 20 percent, inflation was in the teens, and the market lost 27 percent. In 1987, the market lost 20 percent in a single day.

Earlier this century as many investors are still smarting from the tech bubble burst and the S&P 500 lost 49 percent, while the Nasdaq Composite Index dropped 78 percent. To put these historical numbers into context, the Dow Jones Industrial Average in the early 1970s was in the area of 800; in the early 1980s, it was in the area of 1,100; in the early 2000 century (before the tech bubble burst) the Dow was as high as the 11,000 mark; and, after going to a record high of above 12,000 about a year ago, the Dow seems to have pulled back to its latest resistance level (or technical bottom) of around the 8,000 level. The point here is, even at psychological or emotional lows, the market has always moved to higher ground.

This certainly applies if one uses the Dow Jones Industrial Average, the Nasdaq Composite Index, the S&P 500 (or any other of the major indexes) as your gauge for how the market has moved up over time.

The Key is Not to be Emotionally “Pushed” into Selling

While comments such as this – The market slump likes this because it creates opportunities – may seem rather self-serving coming from an analyst, your broker, or some other market index or market guru.

The fact still remains that, for anyone to use these numbers in a presentation to you, the client/ investor, they must have already cleared those numbers with their broker/dealer to ensure their accuracy and proper presentation of any marketing brochures during any client investment presentation.

At the bottom line, if you are persuaded into selling whatever investment you might have because of what a television talking head said last night, you might be making that decision to sell for all of the wrong reasons.

Think first, call your broker, do your own homework, and then make an informed decision.

Paul Rendine is Owner of the Rendine Financial Group, LLC in Salisbury, Md., offering securities through First Allied Securities Inc., member FINRA/SIPC.

You can contact him at 410-860-1137 or at his e-mail address at prendine@1stallied.com with any comments or questions.