When the Australian Stock Exchange closed this afternoon, it was officially down 20% from the record high in February. A 20% decline from a peak is officially regarded as a bear market.
How long will this last? I think the distance in the GFC from peak to bottom was about 16 months – November 2007 til March 2009.
I plan to measure it according to my toilet paper supply. I did an inventory the other day and found that I currently own 85 rolls of toilet paper – the result of steady purchasing and hoarding over the better part of a decade, along with the quaint habit of collecting rolls from hotel rooms, along with the other toiletries. As it is estimated that a person goes through 2 rolls of toilet paper per week, I will be able to last 42 1/2 weeks til my supply of toilet paper runs out. That’s almost 10 months til I will need to buy anymore.
And I am able to improvise. I have paper towels and tissues in abundant supply as well. On top of this, I spend much of my time at work, or at large shopping centres, where the toilet paper is provided for you.
Given that bear markets last on average 14 months, I think that my toilet paper stash will end before the bear market does.
And perhaps that should be when I start investing in the share market again – when my current supply of toilet paper ends, I need to start putting my hard earned cash gradually back into shares (or, in my case, Exchange Traded Funds and Listed Investment Companies).