Tuesday, October 20, 2009

Just a Reminder: "Typical Secular Bear Market and Its Aftermath"

A reader emailed asking our thoughts on the longer term prospects in equities. If you have similar queries I highly recommend the 'Search Blog' box in the upper left. For the last couple years I've used the blog to bookmark commentary that I think is smart (and more importantly, reflects what we think is reality). Here's one example:

Four Stages of a Secular Bear Market

If you do a 'Search Blog' for secular bear market, you'll see this is something I think is important.
It is, for those folks who care about expected future equity returns. Morgan Stanley has put out a nice simple chart on what they look like. Via The Big Picture:

As promised earlier, I pulled up a chart showing the stages of Secular Bear Markets historically.

This fascinating composite chart below is courtesy of the Strategy desk of Morgan Stanley Europe. It shows what the average of the past 19 major Bear markets globally have looked like:

Typical Secular Bear Market and Its Aftermath


The Chart represents typical secular bear markets based on MS’s sample of 19 such bear markets as shown after the jump....MORE