Mitch on the Markets

March 18th, 2019

Remembering the beginning of this bull market

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The 10-Year Old Bull Market

It’s hard to believe that 10 years have passed since the end of the “Great Recession.” But it was on March 9, 2009, that the 2008 bear market finally ended. For the steely-nerved investors who were invested in equities at the time, and have remained in equities for the 10 years since the S&P 500 has delivered a stout +17.8% annualized return.

Patience, rewarded!

Looking back at this recent history of bear and bull markets brings up a crucial point that I believe investors should keep front of mind – patience is almost always rewarded.

When the market crashed in October of 1987, what was the S&P 500’s annualized return (including dividends) in the following 10 years? +17.2%. Following the bear market that ended in August 1982, what was the S&P 500’s annualized return (including dividends) in the following 10 years? +17.6%. And finally, after the harsh bear market that ended in September 1974, the S&P 500’s annualized return for the next 10 years? +15.6%.1

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Is a Bear Market Around the Corner? Get Zacks’ View!

As we celebrate the 10-year anniversary of the Bull Market, it is hard not to wonder “when will the next Bear arrive?” But if history has taught us anything, it is not to get caught up in trying to time the market.

Instead, the key in my view is to stay focused on the fundamentals – economic data releases, earnings reports, and other economic factors! To help you do this, we are offering all readers a look into our just-released April 2019 Stock Market Outlook report.

This report will provide you with our forecasts along with additional factors to consider:

If you have $500,000 or more to invest and want to learn more about these forecasts, click on the link below to get your free report today!

IT’S FREE. Download the Just-Released April 2019 Stock Market Outlook2

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If there is one lesson/takeaway we can apply to big bear markets in hindsight, it’s that some of the stock market’s brightest days – and best returns – have often followed the darkest days. Indeed, just when pessimism and doubt are running at their highest levels, that is just the time when the economy and stock market can and have recovered historically, in my view. The challenge for investors is to understand and acknowledge the power, and reality, of this ‘10-year recovery’ before it happens – as opposed to being on the sidelines while it’s happening.  

Reflecting back on the 2008 Global Financial Crisis, I empathize with the true difficulty of remaining patient and strong-willed in the face of what seemed at the time like total economic destruction and chaos. In the throes of the crisis, the S&P 500 fell by -28% in just 22 days, and the index ended up losing more than half its value through the trough of the bear (March 2009). The unemployment rate in America went from around 5% in January 2008 to 9.8% in January 2010. Millions of Americans lost their jobs and their homes, and the United States entered one of the deepest recessions we’ve ever experienced. At one point, GDP fell by -8.9% in a single quarter (Q4 2008), its worst decline in 50 years. Home mortgage defaults soared from 3.66% to 11.54%.3 It’s easy to understand why some investors felt going to cash was the only option.

But we know today that staying invested even in the most difficult of times would have ushered an investor’s net worth to new heights, given that the S&P 500 passed its 2007 all-time high only 6 years later, in 2013.4 Fast forward to today, the market is far higher than it was in 2013. Patience rewarded yet again.

Bottom Line for Investors

Almost 11 years ago, on September 15, 2008, Lehman Brothers filed for bankruptcy.5 At the time, few investors, analysts, or investment professionals fully understood the extent of damage the Lehman event would ultimately cause to the global economy. Today we understand the full thrust of the impact on jobs, the capital markets, and the livelihoods of many Americans.

Today, we know the path the U.S. economy charted to recovery, with the unemployment rate currently near historic lows and the stock market near all-time highs. The brightest days have often followed the darkest ones.

Looking ahead, I can say with confidence that I believe the United States and global economy will experience another economic crisis in the future. I cannot say when or how severe that crisis will be, just that I strongly believe it will occur.

But I also believe that the U.S. and global economy will recover, that the U.S. stock market will bounce back to reach new all-time highs, and that American workers will live through it. That’s why I believe that investors who remain patient and confident in the long-term strength of the U.S. economy – through good times and bad – stand the best chance of reaping the greatest long-term rewards.

As we have historically seen time and time again, patience is rewarded. To help you stay focused on the long-term, I am offering all readers our Just-Released April 2019 Stock Market Outlook Report.

This Special Report is packed with newly revised predictions that can help you base your next investment move on hard data. For example, you’ll discover Zacks’ view on:

If you have $500,000 or more to invest and want to learn more about these forecasts, click on the link below to get your free report today!

FREE Download – Zacks’ April 2019 Stock Market Outlook6 >>

Disclosure

1 CNBC, March 4, 2019. https://www.cnbc.com/2019/03/04/the-10th-anniversary-of-the-climactic-march-2009-market-bottom-arrives-this-week.html
2 Zacks Investment Management reserves the right to amend the terms or rescind the free Stock Market Outlook offer at any time and for any reason at its discretion.
3 Axios, March 9, 2019. https://www.axios.com/newsletters/axios-deep-dives-e9ec5933-4529-49ff-bbbe-f8a460d1971c.html
4 Yahoo Finance, March 12, 2019. https://finance.yahoo.com/
5 Axios March 9, 2019, https://www.axios.com/newsletters/axios-deep-dives-e9ec5933-4529-49ff-bbbe-f8a460d1971c.html
6 Zacks Investment Management reserves the right to amend the terms or rescind the free Stock Market Outlook offer at any time and for any reason at its discretion.

DISCLOSURE

Past performance is no guarantee of future results. Inherent in any investment is the potential for loss.

Zacks Investment Management, Inc. is a wholly-owned subsidiary of Zacks Investment Research. Zacks Investment Management is an independent Registered Investment Advisory firm and acts as an investment manager for individuals and institutions. Zacks Investment Research is a provider of earnings data and other financial data to institutions and to individuals.

This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. Do not act or rely upon the information and advice given in this publication without seeking the services of competent and professional legal, tax, or accounting counsel. Publication and distribution of this article is not intended to create, and the information contained herein does not constitute, an attorney-client relationship. No recommendation or advice is being given as to whether any investment or strategy is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole.

Any projections, targets, or estimates in this report are forward looking statements and are based on the firm’s research, analysis, and assumptions. Due to rapidly changing market conditions and the complexity of investment decisions, supplemental information and other sources may be required to make informed investment decisions based on your individual investment objectives and suitability specifications. All expressions of opinions are subject to change without notice. Clients should seek financial advice regarding the appropriateness of investing in any security or investment strategy discussed in this presentation.

Certain economic and market information contained herein has been obtained from published sources prepared by other parties. Zacks Investment Management does not assume any responsibility for the accuracy or completeness of such information. Further, no third party has assumed responsibility for independently verifying the information contained herein and accordingly no such persons make any representations with respect to the accuracy, completeness or reasonableness of the information provided herein. Unless otherwise indicated, market analysis and conclusions are based upon opinions or assumptions that Zacks Investment Management considers to be reasonable. Any investment inherently involves a high degree of risk, beyond any specific risks discussed herein.

It is not possible to invest directly in an index. Investors pursuing a strategy similar to an index may experience higher or lower returns, which will be reduced by fees and expenses.
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