Like a long road trip, the first question about a bear market is: Are we there yet? Given the current recessionary fears, we focused our research on previous bear markets that were accompanied by a recession—which showed that this bear may have longer to go. But since it’s impossible to truly predict when any bear will end, the real question may be: Do you know where to re-position your capital rather than when to re-deploy it?

^*A common criticism of the CAPE is that the past 25 years have seen a step function higher in valuations than the previous 50 years, making recent observations appear artificially elevated. 1995 is considered a regime shift from above-target inflation to at- or below-target inflation. We included the averages of this elevated, post-1995 period in Figure 1 to account for this recent upward bias of the CAPE.

Important Risks: Investing involves risk, including the possible loss of principal. • Investments in the commodities market may increase liquidity risk, volatility, and risk of loss if adverse developments occur. • Small-cap securities can have greater risks, including liquidity risk, and volatility than large-cap securities. • Different investment styles may go in and out of favor, which may cause a fund to underperform the broader stock market. • Foreign investments may be more volatile and less liquid than U.S. investments and are subject to the risk of currency fluctuations and adverse political, economic and regulatory developments. These risks may be greater, and include additional risks, for investments in emerging markets.

All information provided is for informational and educational purposes only and is not intended to provide investment, tax, accounting, or legal advice. As with all matters of an investment, tax, or legal nature, you and your clients should consult with a qualified tax or legal professional regarding your or your client’s specific legal or tax situation, as applicable. The preceding is not intended to be a recommendation or advice. Tax laws and regulations are complex and subject to change.

The views expressed here are those of the authors and should not be construed as investment advice. They are based on available information and are subject to change without notice. Portfolio positioning is at the discretion of the individual portfolio management teams; individual portfolio management teams, and different fund sub-advisers, may hold different views and may make different investment decisions for different clients or portfolios. This material and/or its contents are current as of the time of writing and may not be reproduced or distributed in whole or in part, for any purpose, without the express written consent of Hartford Funds.