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How Many Bear Markets Have You Lived Through?

The Big Picture

The chart shows the peak-to-trough declines of all the bear markets with the popular definition of a 20% decline, measured up until the start of the first 20% rally. As Batnick points out, all of these horrendous periods of market pain are already factored into long-term returns of equities. Have a look at the BAML chart above.

Marketing 336
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3rd Quarter Economic And Market Outlook: Understanding Risks And Opportunities In The Web Of Inflation, Interest Rates, Valuations, And More

Nerd's Eye View

At a high level, we're currently seeing a 'tale of 2 economies': While the market for services has expanded steadily since the beginning of the year (with both employment and the price of services growing in kind), the U.S. manufacturing sector, by the measures of employment and service prices, has been in a recession for nearly 12 months.

Valuation 216
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Investing Behavioral Hacks

The Big Picture

Markets screamed higher yesterday after a benign CPI report showed a 0.0% It was a classic fear-driven error, a combination of bad market timing and poor impulse control. It was a classic fear-driven error, a combination of bad market timing and poor impulse control. Last, recognize that markets go up and down.

Investing 344
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3%: Great Depression, GFC, 1970s & 2020s?

The Big Picture

At least if you do forecasts for market returns over the next decade (lol), you may see incredible similarities. In other words, if you were forecasting 10-year returns of 3% annually, you are also forecasting an economic shitstorm of rare and historic proportions. If you are a strategist at Goldman Sachs , then a lot.

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Research links: learning in a bear market

Abnormal Returns

(papers.ssrn.com) Global Why global equity market correlations are on the rise. morningstar.com) Behavior Another indication that political polarization is showing up in investor portfolios. klementoninvesting.substack.com) There's no evidence that economic forecasters can actually forecast.

Marketing 246
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Wednesday links: today’s economic pessimism

Abnormal Returns

riaintel.com) Do you really need a separate allocation to real estate in your portfolio? abnormalreturns.com) It may take some time, but markets eventually work. Strategy Alternatives managers want in on the defined contribution space. morningstar.com) Growth in ETFs are a boon to Jane Street.

Economics 202
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At the Money: Is War Good for Markets?

The Big Picture

 At the Money: Is War Good for Markets? February 14, 2024) What does history tell us about how war impacts the stock market? Can these patterns inform us of future bull market behavior? A 500% move in the stock market. Explain your dad’s thinking about how war plus inflation equals a stock bull market.

Marketing 317