How does this decline compare to previous recessionary ones?

[Koolau]

Our current situation reminds me of the late 70's and early 80's where we had a Bear market, high inflation, and rising oil prices. We also had interest rate increases that more closely matched the inflation rates, something we don't have today. The Fed may change the interest rate situation. We'll see.

In real terms 70's-80's market took over a decade to break even in real terms. Hang on.

Heh, heh. Hope I have a decade. Yes, I'm hanging on! Hoped I would never have to go through the '70s again.

 

[Lsbcal]

UPDATE: Another month has gone by and the chart shows results through July 15.

It seems like this has been the most anticipated recession in history and so far this is not an official recession (as called by the NBER). Employment statistics are robust.

FWIW, I am hoping for a move up to -10% from the November high.

 

[copyright1997reloaded]

UPDATE:

FWIW, I am hoping for a move up to -10% from the November high.

So you are hoping for a 70's show?

 

[freedom2022]

Thank you for the charts. Much appreciated.
Looks like we are heading to the second worst recession.

 

[almost there]

Thank you for the charts. Much appreciated.
Looks like we are heading to the second worst recession.

One difference is the huge run up prior to the decline. Only 2000 comes close.

 

[Alex The Great]

Great chart!
Yes it looks close to 2000. But as anyone can see, all downturns are different and this one is not an exception.

 

[target2019]

Not easy to put a chart into contest, as the run up from say 2016-2022 in unprecedented.
Maybe overlay a longer term chart? Say 10 years? Rather than just from the high. For a better idea.

I see what you mean in this FRED chart. It shows change from year ago for the Wilshire 5000 index. You can further edit the graph at https://fred.stlouisfed.org/series/WILL5000INDFC

 

[street]

UPDATE: Another month has gone by and the chart shows results through July 15.

It seems like this has been the most anticipated recession in history and so far this is not an official recession (as called by the NBER). Employment statistics are robust.

FWIW, I am hoping for a move up to -10% from the November high.

Great chart once again. Thanks

 

[almost there]

I see what you mean in this FRED chart. It shows change from year ago for the Wilshire 5000 index. You can further edit the graph at https://fred.stlouisfed.org/series/WILL5000INDFC

Thanks. And yes, to me it tells a much different tale. Apples to Apples comparisons are not easy this time around.

 

[plex]

The 1920's (low 400% growth) had a very similar run up to the 2010's (high 400%) for SP500. The 1920's had a very dangerous period of deflation though, and was eventually followed by 1970's style inflation. So probably it will be better than the worst crash ever, but worse than 2008.

CPI chart below:

 

[Car-Guy]

UPDATE: Another month has gone by and the chart shows results through July 15.

It seems like this has been the most anticipated recession in history and so far this is not an official recession (as called by the NBER). Employment statistics are robust.

FWIW, I am hoping for a move up to -10% from the November high.

So with the exception of the 2020 rescission (Covid outlier) if this one follows the patterns of the past, we still have a good ways to go... Maybe another year, or more. Unless of course, this one is different.

 

[Lsbcal]

There were at least 2 declines that did not segue into recessions, 1962 and 1987.

First, this chart is not suggesting any particular future.
Second, I produced the chart to remind myself how really extended recessionary bear markets behave. I included weekends and holidays to show how drawn out such market torture could become.

Hopefully we do not fall into recession or we have a recession but it is mild and already discounted by the declines to date.

 

[Gearhead Jim]

Can you post a version that shows how long it took for nominal values to reach their pre-bear level?

 

[target2019]

A bunch of NBER recessions for Sunday morning introspection. I see progress. Have to read the notes on that page to better understanding the "dummy variables."
https://fred.stlouisfed.org/series/USRECDP#

 

[Car-Guy]

Hopefully we do not fall into recession or we have a recession but it is mild and already discounted by the declines to date.

Personally, I think we've been in a recession most of this year or longer. Maybe because of lingering supply chain issues, high inflation, war in Ukraine, high oil prices, slow wage growth, etc...

 

[Lsbcal]

Can you post a version that shows how long it took for nominal values to reach their pre-bear level?

This table is close to what you are asking for. Actually it is closer to what you might want. The SP500 was down about -20% on June 13th.

link to article by Ben Carlson: https://awealthofcommonsense.com/2022/06/how-long-does-it-take-for-stocks-to-bottom-in-a-bear-market/

 

[Gearhead Jim]

^^^^^

Thanks!

 

[Car-Guy]

This "short" clip must be about shorting stocks in today's market.

https://twitter.com/x/status/1549006056629706752

Surprised this doesn't happen more often with ZOOM type calls on live TV.

 

[Lsbcal]

UPDATE: After about a month we see a nice rise. Is this a "bear market rally" or the start of a new bull market? Anyway, I'll take it.

Also a reminder, this just tracks the current market against previous recessionary bear markets. It is not meant to say we are in a recessionary bear market.

FWIW: I will now use this rise to rebalance to my preferred AA. For me, this means selling a few percent equity ... just to do the best with our assets no matter which way this goes, recession or not.

 

[target2019]

When I see the decent rise of 2022, my eyes go to the market line just below (1929). Then I search for similar rises, and it becomes a jumble in my mind.

I guess the lesson is, "Follow your asset allocation."

 

[corn18]

UPDATE: After about a month we see a nice rise. Is this a "bear market rally" or the start of a new bull market? Anyway, I'll take it.

Also a reminder, this just tracks the current market against previous recessionary bear markets. It is not meant to say we are in a recessionary bear market.

FWIW: I will now use this rise to rebalance to my preferred AA. For me, this means selling a few percent equity ... just to do the best with our assets no matter which way this goes, recession or not.

This is great data. Any chance I could get a copy? I want to run the data with dividends and corrected for inflation.

 

[Chuckanut]

The worst market I have even been in was the one that started in 1974. The depth and length of that dive was breath taking. IIRC, it took the US stock market over a decade to recover in real terms. Business week ran its famous issue back then. See below.

This market is a cream puff compared to that one so far. Of course, this BEAR may or may not be heading back to its den for a long period of hibernation. We don't know.

 

[jimbee]

Thank you for continuing to update this graph, Lsbcal. I find it interesting, and I've used it to provide perspective to others considering rash financial moves.

 

[Earl E Retyre]

This table is close to what you are asking for...

link to article by Ben Carlson: https://awealthofcommonsense.com/2022/06/how-long-does-it-take-for-stocks-to-bottom-in-a-bear-market/

That is a great article - thanks for sharing.

 

[GenXguy]

I was kind of hoping the market would drop to 25% off highs or lower because I was moving out of my fixed interest stable value fund at work that pays 1.46% net, and I only got 20% of it moved at the 15% and 20% drop levels before the market went back up. At least it looks a lot better now looking at my total stash $ though.