That is generally the pattern observed at
prior bear market lows through history.
Not exact matches
The favorable
market performance associated with many historical economic expansions is fully accounted for by 1) favorable post-recession valuations, with the S&P 500 averaging less than 9 times
prior peak earnings at the recession
low, expanding to just over 11 times peak earnings in the first year of the bull
market, and 2) favorable trend uniformity, which typically emerges almost immediately in the form of a powerful breadth thrust off of a
bear market low, and is confirmed within a few weeks by much broader trend uniformity.
The level of inflation volatility is still
low, relative to the peaks reached during
prior secular
bear markets.
Because multiples were
low and inflation measures were flattening out, there was no signal
prior to the nearly 30 percent decline during the summer of 1982, which marked the end of a 17 - year secular
bear market.
That said, this model would have told you
prior to each
bear market that future rewards seemed
low — at 5 %, -2 %, and 5 % respectively for the next ten years.
i'd be curious... trying to find it myself... the number of long biased / long only managers that produced postive returns in 2001 - 2002... also looking for info on correlation levels in
prior bear markets between stocks... if 2008 and subsequent swoons in summer 10,11,12 had higher than normal correlations, maybe a garden variety
bear dropping the
market 30 % can still have areas where managers can generate positive returns due to a
lower level of correlations.