Bear Markets Ravage Bull Market Gains, Showing Risk of Passive Investing
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Market corrections historically reverse previous bull market gains, mathematically speaking - a 20% correction wipes out prior 20% gains
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Using percentage returns understates the impact of corrections - looking at point declines shows bear markets devastate previous advances
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Average returns are not the same as actual returns due to periods of capital destruction interrupting compounding
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Long bull markets lure more investors in, increasing risk of larger corrections
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Goals should be minimizing losses, not maximizing returns; more active strategies recommended to preserve capital