Has the Stock Market Hit Rock Bottom?
March 24, 2025
The stock market has been on a relentless rollercoaster, leaving investors rattled as prices plunge. The burning question is: Has the market truly bottomed, or is there more pain ahead? While mainstream narratives flood the airwaves with recycled fear and speculation, the Tactical Investor cuts through the noise with a sharp contrarian lens.
A Brutal Decline—But Is It Over?
The S&P 500 has nosedived over 15% this year, officially dragging us into bear market territory. Tech stocks have taken the worst hit, with the Nasdaq plummeting more than 25% from its highs. Inflation-driven rate hikes have punished high-growth stocks, and risk appetite has all but evaporated. The Fed, determined to crush inflation, is tightening aggressively—forcing the market into a chokehold.
Economic indicators are sending mixed signals. Consumer sentiment is tanking, housing is cooling, yet job growth remains strong. If inflation cools without a job market collapse, stocks could stabilize. But if recession fears escalate, corporate earnings will get shredded, dragging markets further into the abyss.
The Market Bottom: A Game of Perception
Bear markets don’t end when fear peaks—they end when most have given up. Historically, crashes overshoot, obliterating weak hands before reversing course. The key? Markets move ahead of reality—stocks could rebound before the economy does. Timing the exact bottom is a fool’s errand, but opportunity is brewing for those who see beyond the chaos.
The Tactical Investor approach? Ignore the noise, track sentiment, and watch for the real inflexion point—not when panic is loudest, but when exhaustion sets in. The battle isn’t over yet, but the time to prepare is now.
Fear Destroys Wealth, But Patience and Discipline Build It
In times of uncertainty, emotions run high, and panic-driven decisions wreak havoc on portfolios. The masses react to fear, selling at the worst possible moments, while seasoned investors recognize that chaos breeds opportunity. Markets are a battlefield where those who remain neutral, patient, and disciplined ultimately emerge victorious.
The current sharp correction (as of March 24th) has shattered confidence, yet history shows that downturns are the breeding ground for future gains. The impatient get shaken out, while those who maintain composure position themselves for the next surge. Timing the exact bottom is impossible, but understanding the psychology of market cycles gives you an edge.
Success in investing isn’t about reacting to every dip—it’s about controlling your emotions, recognizing when fear has peaked, and acting decisively when others hesitate. The question is: Will you let uncertainty dictate your moves, or will you master it and turn it into your advantage?
Cognitive Biases: How to Exploit Market Fear for Profit
Market selloffs aren’t just about fundamentals—they’re driven by psychology. When fear takes over, investors fall into predictable cognitive biases that fuel irrational decisions. Recognizing these biases isn’t just insightful; it’s profitable.
- Loss Aversion – Investors feel the pain of losses far more than the joy of gains. This bias forces them to sell in panic, locking in losses instead of holding through recovery. Smart money exploits this by buying undervalued assets when fear is at its peak.
- Herd Mentality – The instinct to follow the crowd is strong when everyone is selling. But history proves that following the herd often leads to disaster. Contrarians step in when the masses flee, positioning for the inevitable rebound.
- Recency Bias – Investors assume the recent past will continue indefinitely. A falling market makes them believe it will never recover, just as a soaring market convinces them it will never drop. Recognizing this bias helps in identifying turning points before the majority catches on.
- Confirmation Bias – People seek information that reinforces their fears. During a selloff, negative headlines dominate, fueling more panic. Successful traders filter out the noise and focus on data, not emotions.
- Anchoring Bias – Investors fixate on past highs, assuming stocks must return to those levels soon. Instead of reacting to new realities, they cling to outdated reference points, missing better opportunities in undervalued assets.
Markets don’t move purely on logic; they move on emotion. The winners are those who recognize these biases, detach from the herd, and act when others hesitate. The question isn’t whether fear will subside—it always does. The real question is: will you capitalize on it or let it paralyze you?
Has the Stock Market Hit Bottom: Insights from The Tactical Investor
So far, we have examined the prevailing consensus, but our perspective on whether a market has hit bottom diverges significantly. In a nutshell, when a market experiences a significant correction or crash from a long-term standpoint, we see it as a buying opportunity. Allow the chart below to illustrate this perspective – sometimes, a chart speaks a million words.
This long-term chart effectively dispels any concerns about the narrative surrounding whether the market has reached a bottom or not. Any investor with the foresight to use firm corrections or so-called crashes to buy top stocks would have profited significantly, making out like “bandits.” Therefore, the primary focus should be building a portfolio of high-quality stocks before market pullbacks occur. This way, when they do, you’ll be well-prepared to act and potentially seize opportunities like a savvy “bandit” of the financial world.
Lost Opportunities in Market Crashes: A Contrarian’s Edge in 2025
Market crashes are often glorified as the ultimate buying opportunities, but most investors miss the real wealth-building phases. While waiting for the “perfect” crash, they ignore the gains unfolding during recoveries and expansions. The biggest fortunes aren’t made at market bottoms—they’re built by positioning ahead of the masses before the rebound gains momentum.
Today’s landscape echoes past cycles. Investors, gripped by fear of rate hikes, inflation, and geopolitical tensions, have fled risk assets. But history shows panic-driven selling creates deep-value entry points, not long-term risk. The S&P 500 recently tested key technical support levels, and despite recession fears, corporate earnings remain resilient. The smart money isn’t running—it’s accumulating.
Contrarian success lies in recognizing patterns. Past crashes—from 1987 to 2008—followed the same psychological script: fear-driven selloffs followed by prolonged recoveries that rewarded disciplined investors. If history rhymes, the current selloff isn’t a sign of doom but a precursor to future gains. Those who wait for certainty will once again watch from the sidelines as the market moves higher.
Mastering Market Cycles: The Psychology of Fear and Opportunity
Markets move in cycles—accumulation, markup, distribution, and markdown. Yet, investors consistently misread these phases, buying when euphoria peaks and selling when fear dominates. The latest downturn has triggered widespread uncertainty, but this is where the true wealth transfer happens—from the fearful to the strategic.
With inflation moderating and central banks nearing peak tightening, conditions are shifting. The AI boom, corporate buybacks, and sector rotation quietly set the stage for the next rally. This isn’t the time to follow the crowd—it’s the time to study where smart money flows.
Mass psychology tells us one thing: markets bottom when fear is highest, not when clarity arrives. The disciplined investor thrives by acting before the narrative shifts. Recognizing this cycle is the difference between chasing gains and leading the trend.
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