Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Morningstar chart showing history of bull markets
Old 05-30-2014, 02:37 PM   #1
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
REWahoo's Avatar
 
Join Date: Jun 2002
Location: Texas Hill Country
Posts: 42,101
Morningstar chart showing history of bull markets

Quote:
Bearish calls ... might make you worried about the U.S. stock market, which is more than five years into its bull run that began March 2009.

But a chart created by Morningstar Inc., the Chicago-based investment research firm, shows bull markets often have lasted for more than five years.
This chart may make you less worried about U.S. stocks

My razor-sharp analytical skills immediately focused on the fact there is a lot more blue than red...
Attached Images
File Type: jpg A history of bull markets in one Morningstar chart.JPG (64.3 KB, 201 views)
__________________

__________________
Numbers is hard

When I hit 70, it hit back

Retired in 2005 at age 58, no pension
REWahoo is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 05-30-2014, 02:42 PM   #2
Thinks s/he gets paid by the post
 
Join Date: Nov 2011
Posts: 2,358
Quote:
Originally Posted by REWahoo View Post
This chart may make you less worried about U.S. stocks

My razor-sharp analytical skills immediately focused on the fact there is a lot more blue than red...
The red and blue were much more balanced before the days of the Federal Reserve.
__________________

__________________
GrayHare is online now   Reply With Quote
Old 05-30-2014, 04:13 PM   #3
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Lsbcal's Avatar
 
Join Date: May 2006
Location: west coast, hi there!
Posts: 5,681
Love those bullish graphs Rewahoo!
__________________
Lsbcal is online now   Reply With Quote
Old 05-30-2014, 04:26 PM   #4
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
audreyh1's Avatar
 
Join Date: Jan 2006
Location: Rio Grande Valley
Posts: 16,466
There was some argument at M* that this graph left out a couple of bear markets, but still!
__________________
Well, I thought I was retired. But it seems that now I'm working as a travel agent instead!
audreyh1 is online now   Reply With Quote
Old 05-30-2014, 07:00 PM   #5
Recycles dryer sheets
 
Join Date: Jan 2014
Posts: 243
Very nice

Sent from my HTC One_M8 using Early Retirement Forum mobile app
__________________
Turboslacker is offline   Reply With Quote
Old 05-30-2014, 07:32 PM   #6
Thinks s/he gets paid by the post
 
Join Date: Feb 2007
Posts: 1,905
Quote:
Originally Posted by GrayHare View Post
The red and blue were much more balanced before the days of the Federal Reserve.
Yeah for the Federal Reserve! - I wanna more blue - note non-political statement.
__________________
ejman is online now   Reply With Quote
Old 05-30-2014, 08:24 PM   #7
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Lsbcal's Avatar
 
Join Date: May 2006
Location: west coast, hi there!
Posts: 5,681
The Federal Reserve came about as a reaction to the panic of 1907. Didn't fix everything though.
__________________
Lsbcal is online now   Reply With Quote
Old 05-30-2014, 10:36 PM   #8
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
NW-Bound's Avatar
 
Join Date: Jul 2008
Posts: 19,404
This chart looks 'awfully' good. If the market is this good, why do we worry about not being able to afford early retirement?

It bothers me, because it appears to be in conflict with other info, for example FIRECalc that tells us there were tough periods in the past.

Then, it occurrs to me that the chart shows total returns, but before inflation! Subtract out the loss due to inflation, then perhaps the "blue" areas are no longer so impressive, and the "red" may grow larger. Yes? I am sure there will remain more blue than red, else why bother to invest, but the difference will not be so striking.
__________________
"Old age is the most unexpected of all things that can happen to a man" -- Leon Trotsky
NW-Bound is offline   Reply With Quote
Old 05-31-2014, 05:26 AM   #9
Thinks s/he gets paid by the post
 
Join Date: May 2014
Location: Utrecht
Posts: 2,211
Quote:
Originally Posted by NW-Bound View Post
Then, it occurrs to me that the chart shows total returns, but before inflation! Subtract out the loss due to inflation, then perhaps the "blue" areas are no longer so impressive, and the "red" may grow larger. Yes? I am sure there will remain more blue than red, else why bother to invest, but the difference will not be so striking.
This bothers me frequently, people producing charts and disregarding inflation and deflation.

For example, the 1930s weren't so bad as the graph seems to indicate. Yes, the index dropped 80%, however in the same period there also was a deflation of about 25%. In the mean time you also got about 4% real dividend. Still no great performance.

Likewise, that -42% drop in the 70s also had terrible inflation and bled over in the 80s.

A look at Shiller's data: If you start in 1973 at a real index of 100, and then jump to 1982: -60% loss in real terms. One mighty bear market. Luckily, this is also without dividends.
__________________
Totoro is offline   Reply With Quote
Old 05-31-2014, 09:53 AM   #10
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Sep 2005
Location: Northern IL
Posts: 18,271
Quote:
Originally Posted by Totoro View Post
This bothers me frequently, people producing charts and disregarding inflation and deflation.

For example, the 1930s weren't so bad as the graph seems to indicate. Yes, the index dropped 80%, however in the same period there also was a deflation of about 25%. In the mean time you also got about 4% real dividend. Still no great performance.

Likewise, that -42% drop in the 70s also had terrible inflation and bled over in the 80s.

A look at Shiller's data: If you start in 1973 at a real index of 100, and then jump to 1982: -60% loss in real terms. One mighty bear market. Luckily, this is also without dividends.
+2

Not a criticism of the OP, it certainly is an interesting graph and worth posting. But w/o inflation/deflation accounted for, it really doesn't paint a very accurate picture.

Anyone willing to mock one up that matches the format in the OP? Not me, I've got grass to cut!

-ERD50
__________________
ERD50 is online now   Reply With Quote
Old 05-31-2014, 10:12 AM   #11
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Lsbcal's Avatar
 
Join Date: May 2006
Location: west coast, hi there!
Posts: 5,681
Sorry, this is not the same format but might be a useful comparison:

__________________
Lsbcal is online now   Reply With Quote
Old 05-31-2014, 10:43 AM   #12
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
NW-Bound's Avatar
 
Join Date: Jul 2008
Posts: 19,404
Now, we are reminded that the decade of 2000-2010 was hell. We should all pat ourselves on the back for surviving it, and many even prospered.

Then, the decade of the 70s was also bad, and the 40s was nothing to write home about.

Here, let's toast a drink to the big unknown awaiting us in the years ahead. I've got my motorhome as the potential housing of last resort. How about you?
__________________
"Old age is the most unexpected of all things that can happen to a man" -- Leon Trotsky
NW-Bound is offline   Reply With Quote
Old 05-31-2014, 12:37 PM   #13
Administrator
W2R's Avatar
 
Join Date: Jan 2007
Location: New Orleans
Posts: 38,869
If the present bull market continues for another five years or more, I hate to think what will happen to the forum.

Normally rational old time members might become self-styled "investment geniuses" like all those newbies who come here, try to tell us how brilliant they are, and disappear. Egos would be over the top!
__________________
Already we are boldly launched upon the deep; but soon we shall be lost in its unshored, harbourless immensities.

- - H. Melville, 1851
W2R is online now   Reply With Quote
Old 05-31-2014, 01:10 PM   #14
Moderator
MichaelB's Avatar
 
Join Date: Jan 2008
Location: Rocky Inlets
Posts: 24,449
Quote:
Originally Posted by W2R View Post
If the present bull market continues for another five years or more, I hate to think what will happen to the forum.

Normally rational old time members might become self-styled "investment geniuses" like all those newbies who come here, try to tell us how brilliant they are, and disappear. Egos would be over the top!
It's entirely possible and should not be discounted, although I have no idea if it is likely. Housing construction has been a major component of economic growth in the past and it continues at historically low levels. Even a slow growth trend will slowly push the overall rate of growth up.
__________________
MichaelB is offline   Reply With Quote
Old 05-31-2014, 01:42 PM   #15
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Lsbcal's Avatar
 
Join Date: May 2006
Location: west coast, hi there!
Posts: 5,681
Quote:
Originally Posted by W2R View Post
If the present bull market continues for another five years or more, I hate to think what will happen to the forum.

Normally rational old time members might become self-styled "investment geniuses" like all those newbies who come here, try to tell us how brilliant they are, and disappear. Egos would be over the top!
That old timer rationality came after some investment genius phases. One advantage of aging.

If I had to guess, I'd guess we will have a moderately rising market (on average) for quite some time.
__________________
Lsbcal is online now   Reply With Quote
Old 05-31-2014, 06:12 PM   #16
Thinks s/he gets paid by the post
 
Join Date: Feb 2007
Posts: 1,905
Quote:
Originally Posted by NW-Bound View Post
Now, we are reminded that the decade of 2000-2010 was hell. We should all pat ourselves on the back for surviving it, and many even prospered.

Then, the decade of the 70s was also bad, and the 40s was nothing to write home about.

Here, let's toast a drink to the big unknown awaiting us in the years ahead. I've got my motorhome as the potential housing of last resort. How about you?
Interesting observation NW-Bound. I would guess that a good majority of the already ER'd posters @ this forum did so during the 2000-2010 decade (I'm a 1/1/2003 graduate) I guess we are a bunch of tough cookies uh?

As to the housing of last resort - 7 acres and house in SW Oregon paid for - far away from civilization. Hand pump for water and plenty of forest for firewood. Hell, the only threat is Big Foot somewhere nearby...
__________________
ejman is online now   Reply With Quote
Old 05-31-2014, 06:29 PM   #17
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
NW-Bound's Avatar
 
Join Date: Jul 2008
Posts: 19,404
I've got my homes too, but can I rule out the chance they have to be liquidated to get money for cat food? I cannot live off the land in either place.

As I explained in another thread (see: Poll: What was NW/Yr. Exp. ratio when you retired?), I have imagined the future in two alternate extreme scenarios, and I can manage and try to have fun in either one.
__________________
"Old age is the most unexpected of all things that can happen to a man" -- Leon Trotsky
NW-Bound is offline   Reply With Quote
Old 05-31-2014, 08:21 PM   #18
Thinks s/he gets paid by the post
Bikerdude's Avatar
 
Join Date: Jul 2006
Posts: 1,901
Quote:
Originally Posted by NW-Bound View Post
This chart looks 'awfully' good. If the market is this good, why do we worry about not being able to afford early retirement?

It bothers me, because it appears to be in conflict with other info, for example FIRECalc that tells us there were tough periods in the past.

Then, it occurrs to me that the chart shows total returns, but before inflation! Subtract out the loss due to inflation, then perhaps the "blue" areas are no longer so impressive, and the "red" may grow larger. Yes? I am sure there will remain more blue than red, else why bother to invest, but the difference will not be so striking.
Me thinks you may be onto something.

The S&P 500, Dow and Nasdaq Since Their 2000 Highs
__________________
“I guess I should warn you, if I turn out to be particularly clear, you've probably misunderstood what I've said” Alan Greenspan
Bikerdude is offline   Reply With Quote
Old 05-31-2014, 09:00 PM   #19
Recycles dryer sheets
 
Join Date: Aug 2012
Posts: 138
Bikerdude - that chart is depressing. Why am I investing in equities?!
__________________
Live Free is offline   Reply With Quote
Old 05-31-2014, 09:07 PM   #20
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
NW-Bound's Avatar
 
Join Date: Jul 2008
Posts: 19,404
Because the "Lost Decade" is behind us, and "Happy Days Are Here Again"?

Besides, so many of us survived and prospered through that terrible decade, as described by the testimonies told in a concurrent thread and others before that.

__________________

__________________
"Old age is the most unexpected of all things that can happen to a man" -- Leon Trotsky
NW-Bound is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
GE Showing Some Bad mojo haha Stock Picking and Market Strategy 27 03-12-2009 03:42 PM
Stock Markets: When Will the Bull Return? lightwaves FIRE and Money 12 03-10-2009 04:27 PM
Showing off my wife's sewing projects Marquette Other topics 28 09-04-2008 07:22 PM
Location not showing...... Dawg52 Forum Admin 17 07-25-2008 06:38 PM
"Showing men how to survive and thrive" Nords Health and Early Retirement 3 11-16-2006 05:47 PM

 

 
All times are GMT -6. The time now is 11:18 AM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.