During bear markets beginning in 1980, 2000, and 2007 — the ones in which bond exposure was most helpful — the rate of inflation declined.
Putting aside the performance of bonds
during the bear market beginning in 1980 (both because the starting yields on Treasuries were so high but also because the bear market was relatively mild as the decline began from relatively low levels of valuation), what's interesting about the above chart is how dependably bonds protected a portfolio during equity bear markets.
During the bear market beginning in 1973, the inflation rate increased by more than 9 percentage points — from 3.4 percent to 12.4 percent.
During the bear market beginning in 1973, the inflation rate increased by more than 9 percentage points — from 3.4 percent to 12.4 percent.
Putting aside the performance of bonds
during the bear market beginning in 1980 (both because the starting yields on Treasuries were so high but also because the bear market was relatively mild as the decline began from relatively low levels of valuation), what's interesting about the above chart is how dependably bonds protected a portfolio during equity bear markets.
Not exact matches
Again, I want to stress that the U.S. economy was already in recession (which will ultimately be dated as
beginning during the first quarter of 2001), and the
market was already in a
bear market before last week's tragedy.
The historical record indicates that the gold - mining sector performs very well
during the first 18 - 24 months of a general equity
bear market as long as the average gold - mining stock is not «overbought» and over-valued at the
beginning of the
bear market.
This includes the losses incurred
during the 2000 - 2002
bear market, as well as the
bear market beginning in 1968, where annualized returns were -0.4 % over the following 12 months and -3.4 % over 18 months.
Notice that
during the last three
bear markets, and especially
during the last two major stock -
market declines
beginning in 2000 and 2007, bonds ramped up their defensive characteristics, helping a standard policy portfolio avoid between roughly 55 and 70 percent of the drawdown.
You can see the aftermath in the next set of graphs, which show the same interaction of
market valuation and the volatility of inflation, but in this case
during the three secular
bear markets of last century, and the secular
bear market beginning in 2000.
The main argument of the post — one that has been made many times before — is that passive investing is fine
during bull
markets, but it likely won't work going forward because «we are in a secular
bear market that
began in 2000.»
The main argument of the post — one that has been made many times before — is that passive investing is fine
during bull
markets, but it likely won't work going forward because «we are in a secular
bear market that
began -LSB-...]
A few years ago, Congress created another way to claim AMT credit, designed primarily to provide relief from disastrous results that occurred when people exercised ISOs before or
during the vicious
bear market that
began in 2000.
Notice that
during the last three
bear markets, and especially
during the last two major stock -
market declines
beginning in 2000 and 2007, bonds ramped up their defensive characteristics, helping a standard policy portfolio avoid between roughly 55 and 70 percent of the drawdown.
This includes the losses incurred
during the 2000 - 2002
bear market, as well as the
bear market beginning in 1968, where annualized returns were -0.4 % over the following 12 months and -3.4 % over 18 months.
During bear markets, each time there is a precipitous drop, it is followed by a modest recovery, masking as the
beginning of a new bull
market.
Last year,
during cryptocurrencies» seemingly endless run up, Wall Street
began to cautiously embrace bitcoin as a way to find outperformance in a
market that was rather
boring.