TradeWinds Bear Market Sanity Check

As I sit here watching DIA, SPY, SMH and other ETFs take on their 50 day moving averages, confirming the building long momentum that we have been documenting on this site for the last several days, I have to ponder the feared Bear Market that we read so much about.

Using the DIA as my example, since I use that to invest in the Dow 30, lets take a broad look at the numbers. October 19th, 2007 it hit all all time high of 140.24. From that point it dropped about 15 percent to a low of 118.99 on Jan. 22nd of this year. That's a big ouch if you had bought at the high in October, but of course few of us did. If you had bought at the 2007 low of 117.74 you would be up over 7 percent today and never would have gone under water.

Looking at 2006, if you bought at the high of 121.85 you would be up about 4 percent today, if you had bought at the low you would be up 23 percent. For 2005, buying at the high gives you about 20 percent gain, buying at the low gives you about 31 percent gain.

Those are not bad returns for the buy, hold and pray strategy. And we know the Dow was not the best market to be in the last few years. Where's the Bear?

To further reinforce our mantra of Don't Ask Why, read this wonderful article on the nature of Bear Markets. You will learn to never belief what you hear from the so called experts and to start loading up the truck when you hear eveyone talk about how bad the world has become.