Yesterday, we talked about the big picture around the coronavirus crisis: the pandemic itself, the likely economic effects, and, last but certainly not least, the market reactions. Next, I want to start a more detailed discussion of each component. We will deal with the pandemic today, the economy tomorrow, and the markets on Friday. Although the big picture provides valuable context, there is also quite a bit to be gained by diving deeper into each component.

With everything that is happening in the world, now is a good time to step back and think about where we are and where we might be going. There is a tremendous amount of information available. But what’s missing is a framework for that information that would help clarify the big picture.

My son has a stuffed bear he got when he was quite small (from Commonwealth, as it happens). We used to play a game where the bear would sneak up on him. “Where bear? There bear!” Well, the bear is now here. We have finally seen the end of the bull market, with the Dow dropping 20 percent from its highs and the S&P 500 following today. We are officially in a bear market, with all that implies. Stock markets around the world are down again today on the news.

In early March, we saw markets drop worldwide. In fact, the 7.5 percent decline on March 9—which, coincidentally, happens to be the 11th anniversary of the bull market—was the largest since 2008. With a total decline of almost 19 percent, in less than a month, this certainly looks like a crash—doesn’t it?

In January, members of Commonwealth’s Investment Management and Research team traveled to Florida for the Inside ETFs conference, which has become the world’s largest conference on this topic. We met with and heard from industry experts and a number of ETF providers, and we networked with peers from other firms to discuss the latest trends within the ETF industry. Every year, a couple of topics seem to dominate the discussions. This year, without question, the two hottest topics were the emergence of nontransparent actively managed ETFs and the surge in environmental, social, and governance (ESG) investing.

Monday, March 9, will be the 11th anniversary of the bull market that started back in 2009. With recent pullbacks and turbulence around the coronavirus, it is reasonable to worry that this anniversary will be the last and that a bear market will break the streak sometime in the next year. As such, now seems a good time to consider where we stand—and where the market might be headed.

I know I am coming a bit late to the party on this, as there has already been a great deal of commentary and reaction to yesterday’s unexpected move by the Fed to cut interest rates by half a percentage point. Markets dropped after the announcement, but we are now seeing a strong rally. Pundits are on all sides of the issue. So, what’s really going on?

This week has been one of the worst in history for the stock market. With the Dow and S&P 500 now down more than 15 percent from recent highs (of only weeks ago!), fears are rising that this pullback might be the precursor to another crisis. So what should we, as investors, do to protect ourselves? Since panic is never the right answer, we need to think through and understand what is really happening—and what is not.

In yesterday’s post, I pointed out that the markets were taking a break, stopping the sudden slide to think about whether the news surrounding the coronavirus is really as bad as all that. Today, they appear to have decided that, yes, things are that bad and may be even worse. Perhaps, then, it is time for me to reassess my conclusions.

Yesterday, the global financial markets experienced another notable drop, reflecting investor concerns regarding the ongoing spread of the coronavirus. The major U.S. indices went down an additional 3 percent or more. These losses, on top of the drops we saw on Monday, have taken down the market significantly—with the S&P 500 more than 7 percent off its high of four days ago.