But while investors should proceed cautiously, they shouldn't be blind to the opportunities that are developing. The long-term returns offered by stocks don't depend on a single year's earnings. And by that measure, many tech stocks and other growth stocks are down to average or slightly below-average prices. Even those that still command premiums are not unreasonably overvalued for their growth rates. None of that means that this bear market is over yet.
Stocks typically end a major decline by overshooting on the downside.
But I think it's a terrible mistake to give up on stocks as long- term investments just because after a decade of growth there's been a bear market. Following debacles like the recent Tech Wreck, stocks historically have gone for 10 years or longer without a comparable setback. Excluding the Great Depression, stocks that have been through a massive decline make back their losses in no more than seven years. But even in that worst- case scenario, the top growth stocks would return nearly 14 percent a year, on average. Sign up to get Sivy on Stocks delivered by e-mail three times weekly.