Banks now vs. tech in 2002

Here's an interesting Barron's article comparing the behavior of the banking sector today to that of the tech sector back in 2002. As you likely recall, tech led the bear market down from 2000-2002, whereas the banking sector has been the primary culprit in the current bear market.

Particularly noteworthy is the author's emphasis on the fact that bottoming is typically "a process, not an event." What that means in simplest terms is that trying to figure out whether the bear market bottomed in early March may be answering the wrong question, as there could very well be a significant retest from today's levels even if the ultimate bottom is already in place. In other words, don't expect stocks to continue racing straight up from here into the next bull market.

You've been hearing similar things in this blog for a month or two now, but this is a helpful look back to see how this process played out the last time around. As always, managing your expectations can be a key factor in sticking to your long-term investing plan.

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Mark Biller is Sound Mind Investing's Executive Editor. Visit www.soundmindinvesting.com to learn more.