A major difficulty to figuring out whether we are out of the bear market is that most retail investors do this using personal instinct (aka ‘gut feel’). With developments in machine learning, we can now deploy algorithms to figure out which regime we are in at the moment.
How to tell where the market is now?
A straightforward way to identify the economic regimes that we are in would be to assume that markets can exist in two states:
...- A “normal” state where markets are mostly predictable, and we can make money without losing too much sleep.
- A “crash” state where markets can lose the investor a lot of money and are highly volatile.
