Stock Performance Around Recessions

Stock Performance Before, During & After Recessions

 

A few weeks ago I urged readers to get used to the fact that recessions are a fact of life that they need to get used to every 4-10 years or so. I shared the following table with each recession since the late-1920s:

Recessions HistoricalThe next logical step from here is the see how stocks performed in and around these past recessions. I only have monthly S&P 500 returns going back to the mid-1950s, but that was good enough to show the total returns leading up to, during and after each of the past nine recessions:

recession perf 

 

You can  the complete article here

Stock Market Predictions From a Broken Record

The following was originally posted by my friend Rick Kahler.  I share his sentiments exactly.  I hope you enjoy it……

 

For investors, happy days have been here so long that it’s beginning to seem surreal. The United States stock market is at all-time highs; we have low unemployment rates and solid company profits. The big question is, “What will happen in the near future?”

It’s a question that no reporter has asked me for years. The reason is simple. When it comes to predictions for the US stock market, I am a boring, broken record. There is nothing exciting, stupendous, or scintillating in my predictions. They are always the same.

If a reporter did interview me, here’s how the conversation might go:

Q: What are your predictions for the US stock market this year?

A: If there are more buyers than sellers it will go up. If there are more sellers than buyers, it will go down.

Read the complete article here

The More Things Change….

I had an opportunity to watch Dr. Jeremy Siegel speak yesterday – right after a panel of futurists who talked all about the wild possibilities (technologically and politically) for the future.

Siegel pointed out that the stock market has returned, over long periods of time, about 6.8 % REAL RETURN consistently since 1802 – over 200 years.  His implication was that the market would continue to do this – in spite of the rapidly changing world.

As I listened, I realized that the world has changed a lot since 1802 and that we and the markets have adapted to the change that we have seen.  Dr. Siegel expects that the markets will adapt to accommodate the rapidly changing world of the future.  I agree. As long as you don’t try to pick the winners, your portfolio will continue to grow and adapt.

The more things change, the more they stay the same.

There always has been change and always will be.