How far we've come ... (now what??)

[Lsbcal]

By not-so-popular demand here is an update of my chart for various historical US market recoveries and our current one:

You may speculate below about where we are headed with this.
FWIW, I'm optimistic but I always get a little drunk on profits.

 

[Tigger]

Hm. If I ignore your "WARNING: chart not predictive" ... I'd say we may be crashing again in a year and a half.

Any idea when your crystal ball will be repaired? ;-)

 

[plex]

Yup, 18 months, then do a downshift. Early 2014 was indeed about the time I plan on getting more conservative. Might stay tight though if we enter a period of extreme inflation.

 

[ejman]

Thank you for the update. If that blue line continues to track that red line so closely all I can say is I hope the KABOOM! 12 to 18 months from now is as well behaved (and brief!) as the one in 87.

 

[copyright1997reloaded]

As someone who's been through the 87 crash (and 80's experience), it just doesn't "feel" the same. By '85 things were moving, which partially explains Reagan's 49 state victory in the 84 election (and the 50th state was close). But, for whatever reason, that is what we are tracking closest to (at least of the recoveries listed).

I've been a net buyer since late 2008, but I've been struggling of late in terms of market decisions. On one side (the negative side), we've got massive issues and an again faltering economy, which should squeeze profits. On the other side (the positive/greedy side), I think this years performance to date has surprised a lot of people who have been caught at least partially on the side lines. Also, one of the very first things I "learned" as an investor way back when is "don't fight the fed". So, I dunno, so far I haven't sold to scale back (except a trivial amount).

 

[ejman]

As someone who's been through the 87 crash (and 80's experience), it just doesn't "feel" the same. By '85 things were moving, which partially explains Reagan's 49 state victory in the 84 election (and the 50th state was close). But, for whatever reason, that is what we are tracking closest to (at least of the recoveries listed).

I've been a net buyer since late 2008, but I've been struggling of late in terms of market decisions. On one side (the negative side), we've got massive issues and an again faltering economy, which should squeeze profits. On the other side (the positive/greedy side), I think this years performance to date has surprised a lot of people who have been caught at least partially on the side lines. Also, one of the very first things I "learned" as an investor way back when is "don't fight the fed". So, I dunno, so far I haven't sold to scale back (except a trivial amount).

Yes, I've always been mindful of the "don't fight the Fed" bit. And for all intents and purposes, the Fed is practically sending skywriting planes up there with "BUY STOCKS" in BIG letters. So far those of us that took the hint (more like a 2X4 on the side of the head) have been doing fine. But we all keep wondering how long until?

 

[Lsbcal]

As some have noticed declines in the 1930's, 1980's, and 2000's seemed to come about 60 months from the last nasty low. It's unfortunate that those were all for quite different macro reasons which probably bear no resemblance to our current world. One could get very philosophical about this stuff.

Still it's fun to see what has happened in the recent past and do this sort of compare. At least we can get the technical history right.

 

[mathjak107]

the only important lesson is this;

markets always recover given enough time.

in fact we have never had a 15 year period where at some point a retiree couldnt have found a high and not sold at a loss to raise more cash. we have had longer time frames with out new highs but we always had some high point even if it didnt stick around for the rest of the year.

so my shortest time frame for investing in equities is 15 years and i tend to like bucket systems myself since they buy time as well as assets.

 

[audreyh1]

My instincts are that we remain flattish (although with plenty of volatility) until 2015, and then around the 78th month or thereabouts we could have another hard sell off, before going on to a bull run.

But who knows? My crystal ball is opaque.

 

[obgyn65]

You forgot to say that this time there has been federal intervention (auto bail outs, QE, etc) to help the economy. Things have not been the same this time round.

the only important lesson is this;

markets always recover given enough time.

 

[mathjak107]

actually if you go back 15 years they still hold true and we are on track for it holding true for the year 2000 going forward as well.

there is always a reason we take the plunge and always a reason we come out of it but so far its been a fact that given 15 years or longer markets always recover.

 

[mathjak107]

My instincts are that we remain flattish (although with plenty of volatility) until 2015, and then around the 78th month or thereabouts we could have another hard sell off, before going on to a bull run.

But who knows? My crystal ball is opaque.

come on audrey ,its clearly the 80th month ,anyone can see your wrong.

 

[Keim]

You forgot to say that this time there has been federal intervention (auto bail outs, QE, etc) to help the economy. Things have not been the same this time round.

Haven't we had fed bailouts/stimulus before? I'm thinking specifically of Chrysler in the early 80s, and elements of the New Deal from Franklin "Throw a bunch of **** on the wall and see what sticks" Delano Roosevelt.

 

[Nemo2]

Every time the markets go up, and we're a few dollars better off, we ask ourselves "Why?"

The only answer we've been able to come up with is "Because".

 

[IBWino]

My instincts are that we remain flattish (although with plenty of volatility) until 2015, and then around the 78th month or thereabouts we could have another hard sell off, before going on to a bull run.

But who knows? My crystal ball is opaque.

Perfect! Planning to FIRE in 2016, so as long as the sell-off isn't too severe, I'll take it!

 

[Free To Canoe]

My instincts are that we remain flattish (although with plenty of volatility) until 2015, and then around the 78th month or thereabouts we could have another hard sell off, before going on to a bull run.

But who knows? My crystal ball is opaque.

Up some, and then flattish is my vote.

 

[goneboarding]

Is there a place we can get updates to this chart... like every 4 months or so. Will be interesting to see how close we track to the 80's graph.

 

[Midpack]

It shows that what happens following a major market sell off can't be predicted...other than the (very) long term trend has always been up. And the long term trend will always be up, until it's not. The two strongest recoveries can be easily explained, no such obvious influences on the current recovery (yet).

 

[rbmrtn]

Doug Shorts has a nice blog site with lots interesting graphs updates...

This one is similiar but excludes dividends

Bear Market Recoveries Since 1950

 

[Lsbcal]

Is there a place we can get updates to this chart... like every 4 months or so. Will be interesting to see how close we track to the 80's graph.

I'll try to post an update about once per quarter if there is interest.

 

[Onward]

I'll try to post an update about once per quarter if there is interest.

Yes, please.

 

[Lsbcal]

Doug Shorts has a nice blog site with lots interesting graphs updates...

This one is similiar but excludes dividends

Bear Market Recoveries Since 1950

Nice charts there. But mine has prettier colors and includes more bear markets.

Also note, the dividends in the 1930's were substantial and would influence the results. Here is a chart I made (for my study purposes) comparing drops from peak areas. The notes there show 1930's dividends:

 

[goneboarding]

Any updates to this chart? Would like to see how closely we're trending to the market rec0very of 1982.

 

[Lsbcal]

Here is an update to the first chart I posted. Sorry, no time to put in April (but it was up a bit) as I'm taking off on a trip.

 

[Free To Canoe]

Love the color charts!

Thanks for the update.