Which BDs Are Weakest, Strongest in Bad Markets?
September 24, 2020 By Jon Henschen, ThinkAdvisor When advisors shop for a new broker-dealer, the thought of bear market vulnerability is rarely on their radar — but it should be. Between 1926 and 2017, we’ve experienced eight bear markets. Their duration ranged from six months to 2.8 years, while the severity of the decline varied from about 22% to an 83% drop in the S&P 500. The 1973-1974 stock market crash was an especially deep correction, with the market losing over 45% of its value. (The crash came after the collapse of both the Bretton Woods system and the Smithsonian Agreement, causing deep dollar devaluation.) For broker dealers, the 1973-1974 crash was extremely tough. As Raymond James explains on its website, “During the economic downturn of 1973 and 1974, with the survival of the firm...