Monday , 20 August 2018

Here’s What Historically Happens to Stocks When Bull Markets End

…Is the bull market about to come to an end? If last year ends up being thestock market top of this bull market, what does history say could happen to stocks this year?

The original article by Jeff Clark has been edited here for length (…) and clarity ([ ]) by munKNEE.com to provide a fast & easy read.

We dug up the data for all bull markets in the S&P since the year 1900, and then examined what happened in the very first year after each of those bull markets ended. In other words, what did the first year of the bear market look like after the last full year of the bull market? This could be useful data, if 2017 ends up being the peak of the bull market.

Here’s what history shows.

First Year Performance of Bear Market After Bull Market Ends

bear market end

While the declines for the first year of the bear market varied greatly, you can see that on average, the S&P lost 16% the year immediately following the last year of the bull market. Also notice that in only four cases was the decline measured in single digits—all others were double digit losses.

Since this is the second longest bull market in history the decline could well be higher than the historical average and what is gold likely to do in that environment? We’ve shown before that gold has acted as a buffer—and gained ground—in most of the biggest stock market crashes. 

The bottom line for us is that we think a major shift is coming, not just in overpriced stock and bond and real estate markets, but in the currencies that have been abused by many central bankers the world over. Once the process gets underway, the mainstream will turn back to mankind’s oldest form of money in mass, and our patience and forethought will pay off.

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