After dropping 35% from its February 19, 2020 peak of 3,393, the S&P 500 bottomed out on March 23, 2020 at 2,192, ending a selloff that included the quickest bear market in the history of the index and beginning the current bull market, which has seen the S&P 500 rally 81% through March 26, 2021. As fate, or luck, would have it, we published our Bear Market Bottom Checklist on March 23, 2020. We made the case that many of the signs that had historically presented themselves at the end of a bear market – including indiscriminate selling of equities and a steepening of the yield curve – were visible, and that it was time to become more optimistic on the markets.

As we mark the one-year anniversary of the end of the bear market and the introduction of our checklist, we thought now was a good time to consider what lessons were learned from that very difficult period in early 2020. For me, there are three big ones, all of which are interrelated:

1. Policy – monetary and fiscal policy – trumps all, including a global pandemic
2. The system held – in the face of a pandemic, the worse economic downturn since the Great Depression and an extremely difficult political and cultural discourse, the system held
3. There is always a solution to any problem or challenge, always.

As we think about our current bull market and economic expansion, we are reminded both are quite young, and should have years to run. Also, those factors that tend to be present at the end of an economic expansion are not visible today.