I would say we bounce from here to ~4,000 then rollover to ~3,500 over the next month. ~3,200 by Labor Day, another 1,000 points lower over winter. I believe Covid lows of ~2,200 are the most optimistic low outcome this cycle.
I just saw a chart - it claimed that after closing in bear market territory, the average SP500 return for the next 365 days is around +25%.
Which shows how hard this is....we're supposed to see times like these as massive opportunities to make a lot of money. But instead many of us are selling.
Indeed, the only business where people run out of the store when things go on sale.
So you will invest very aggressively at this time.
No, I'm a scaredy cat.
And past performance does not guarantee future performance.
interesting today...TIPs are cratering but other bonds are not.
which suggests the market will respond positively to a 75 bp rate hike...TIPS are suggesting inflation is indeed peaking and the fed is catching up and a 75 bp rise is welcome news and will help whip inflation now.
but it's just one day of course. tomorrow could think the opposite.
I just saw a chart - it claimed that after closing in bear market territory, the average SP500 return for the next 365 days is around +25%.
This is supposed to be good news? Do you realize that +25% would only take the S&P to -15% of its 3.7k high? Optimistically it would take 2-3 years to recover.
interesting today...TIPs are cratering but other bonds are not.
which suggests the market will respond positively to a 75 bp rate hike...TIPS are suggesting inflation is indeed peaking and the fed is catching up and a 75 bp rise is welcome news and will help whip inflation now.
but it's just one day of course. tomorrow could think the opposite.
at least there's a bull case somewhere.
I would think the market will react mildly negatively to a 75 bp rise since that is expected now but not certain. I think the market would jump a little if it's only 50 bp. Still envision a downward trend in the medium term (30-90 days). I'm guessing the low will be 25-30% down from all time highs.
Kind of interesting this is the 3rd bear market in less than 4 years (if you include the late 2018 dip that I think hit 20% down intraday but finished at 19% down). Dips this large happen on average only once every ~6 years. Definitely exacerbating wealth inequality as the haves put more and more money into the market during each crash. Can't really complain because that's what I'm trying to do myself... Just an observation.
I just saw a chart - it claimed that after closing in bear market territory, the average SP500 return for the next 365 days is around +25%.
This is supposed to be good news? Do you realize that +25% would only take the S&P to -15% of its 3.7k high? Optimistically it would take 2-3 years to recover.
the flip side of this type of argument.
if the market does take three years to get back to its high, that's a CAGR of 9%. not bad at all.
If the market takes just two years to get back to its high, that's a CAGR of 14%. Which would be very good.
Which suggests some pretty good returns coming up, even if the rebound is slower than usual and not a V.
That doesn't count dividends, so probably drop a couple of percentage points from those numbers
But anyway, the only way to look at this is from today. Ignore the past. If you hadn't just lost 25%, would you be interested in buying into a market when blood is running on the streets? Yeah probably. But our recent pain makes it hard when we've just suffered a major loss.
This is supposed to be good news? Do you realize that +25% would only take the S&P to -15% of its 3.7k high? Optimistically it would take 2-3 years to recover.
the flip side of this type of argument.
if the market does take three years to get back to its high, that's a CAGR of 9%. not bad at all.
If the market takes just two years to get back to its high, that's a CAGR of 14%. Which would be very good.
Which suggests some pretty good returns coming up, even if the rebound is slower than usual and not a V.
That doesn't count dividends, so probably drop a couple of percentage points from those numbers
But anyway, the only way to look at this is from today. Ignore the past. If you hadn't just lost 25%, would you be interested in buying into a market when blood is running on the streets? Yeah probably. But our recent pain makes it hard when we've just suffered a major loss.
Right. Even when people think they're thinking long term, they're usually only thinking in a timeframe of a year or so. Think in terms of 5 years or even more. It is very likely we will be above 5200 in 5 years. That would be a gain of about 40% from right now. If you have money to be trickling into the market, now is a great time for it.
what would really stink if it is different this time...that the US has degraded enough to make stocks far less successful here. It's already happened in Japan and Europe, where reurns have been terrible...some of the same causes. No reason why it couldn't happen here.
Namely, we don't have a growing population anymore, we don't want immigrants anymore, we don't want free trade anymore, our politics are now unstable, we could elect trump who would end all kinds of global trade and military deals, and a third of the nation doesn't want to live with the other third of the nation.
what would really stink if it is different this time...that the US has degraded enough to make stocks far less successful here. It's already happened in Japan and Europe, where reurns have been terrible...some of the same causes. No reason why it couldn't happen here.
Namely, we don't have a growing population anymore, we don't want immigrants anymore, we don't want free trade anymore, our politics are now unstable, we could elect trump who would end all kinds of global trade and military deals, and a third of the nation doesn't want to live with the other third of the nation.
I do wonder if we can manipulate the market like we have in the past ( big bailouts, stimulus checks, etc.).
Real estate has peaked, and if it falls considerably it could get really bad. So much wealth was created in the last 5 years through the stock market, crypto, and real estate. 2 of the 3 have already turned negative and the prospects for real estate do not look good.
I’m still about 60% long equities in my liquid assets, the other 40% sitting in cash. Most of my net worth is tied up in real estate and stock in 3 private companies that are illiquid.
However, I’m staying long with the 60%, because every time I think the worst days are ahead of us, we miraculously start going up again.
I was up a bit most of the day but my two oils stocks, which had been up kind of big early, settled down. So ended up down yet again -- but a few $$ instead of $20k plus.
Bought the Hussman Mutual Fund but will not see how that did today until tomorrow
I was up a bit most of the day but my two oils stocks, which had been up kind of big early, settled down. So ended up down yet again -- but a few $ instead of $20k plus.
Bought the Hussman Mutual Fund but will not see how that did today until tomorrow
Prices post an hour after market close. Flat on the day $7.17/share.
what would really stink if it is different this time...that the US has degraded enough to make stocks far less successful here. It's already happened in Japan and Europe, where reurns have been terrible...some of the same causes. No reason why it couldn't happen here.
Namely, we don't have a growing population anymore, we don't want immigrants anymore, we don't want free trade anymore, our politics are now unstable, we could elect trump who would end all kinds of global trade and military deals, and a third of the nation doesn't want to live with the other third of the nation.
Aside from the first point about growing population, it's literally always been like this.
what would really stink if it is different this time...that the US has degraded enough to make stocks far less successful here. It's already happened in Japan and Europe, where reurns have been terrible...some of the same causes. No reason why it couldn't happen here.
Namely, we don't have a growing population anymore, we don't want immigrants anymore, we don't want free trade anymore, our politics are now unstable, we could elect trump who would end all kinds of global trade and military deals, and a third of the nation doesn't want to live with the other third of the nation.
Aside from the first point about growing population, it's literally always been like this.
for many decades we welcomed immigrants, we were mostly free traders and globalists, the parties used to work between the 40 yard lines, we used to foster and encourage international agreements and treaties, and this kind of loathing of other Americans isn't normal. It's happened, but not often.
I mean you can always pick a here or there to prove a narrow point against me, but as someone who has been around since the Johnson administration....I can say that this country is changing and these changes may not be good for stocks.
A good start would be allowing the free markets to function without fake crutches masking problems politicians are too spineless and self-serving to tackle.
