Here we go again with another US bear market, at just over two years since the end of the last one. We are all familiar with who and what has produced this self-inflicted wound. Yet given the high valuation of the US market (see “Can You esCAPE US Stock Returns?”), it was only a matter of time until something (or someone) came along to spoil the bull market party. To get an idea of what the bear coming out of hibernation may look like, and the implications for an investment portfolio, I have updated the data and charts from the May 2022 blog “Barely A Bear”.
Category: Expected returns
Can You esCAPE US Stock Returns?
Forecasting bond and stock returns is almost impossible to get right over short time horizons. But over longer time frames the methodology I used in my November 2021 blog Stock Return CAPEr: The Next Decade’s Returns has a good fit with the historical data, particularly the S&P 500. I last updated the estimated returns for US and Canadian stocks in January 2023. Since then, the S&P 500 has been on a terrific run, up 40% in Canadian dollars. Does that mean there is no esCAPE from lower returns over the next 10 years?