Stock Market Risk

Click to enlarge.

As seen in the chart, the unsustainable exponential growth party ended in the first quarter of 2000. In my opinion, those who think our problems all started during the Great Recession are therefore quite mistaken.

Welcome to the new normal! It involves all kinds of exponential trend failures!

Since 2000, we've revisited the median twice. Let's hope we don't revisit the realistic worst case (as seen in the 1950s and 1970s). I say realistic worst case in that historical perspective rear view mirror looking way. Should you be looking out the front window, your realistic worst case may vary!

For what it is worth, I've been permanently bearish since 2004. As a retiree, I no longer have any desire to swing for the fences. I just don't think this economy can support sustainable fence swinging any longer, not that it ever really could. As seen in the chart, the 1980s and 1990s were just an unsustainable exponential growth illusion of prosperity. Those expecting to go back to that era are far more optimistic than I could ever be (especially from these already elevated levels).

This is not investment advice.

See Also:
Stock Market Analysis - The Bearish Case

Source Data:
St. Louis Fed: Custom Chart