Tuesday, June 30, 2009

Some Stock Market Perspective...

Draw your own conclusions. Mine is that while the worst in terms of severity may be behind us, (note the only decline exceeding 66% was during the Depression), in terms of real value and bear market length we have much more to look forward to.

Note how the illustration adjusts for inflation. If, when rather, inflation come back, probably due to better market conditions, true value for stocks will take a big hit.

Also note how during the Depression, stocks shot up, plummeted down as fast as they came, recovered and then grinded down before staging the next bull market in the 1950s. We see a similar downward grind during the 70s (mostly inflation related). This may again play out in our current bear market.

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