“So far 2016 has proven to be an uneven year for investors, with some roller-coaster market swings that left more than a few stomachs churning. For markets to dive into bear territory (down 20%) and stay there, it’s almost imperative that we tip into recession or depression. Take a look at this chart:
It shows calendar-year S&P 500 index returns from 1926-2015, and the rates of return. The years with the worst returns – drops of 10% or greater – almost invariably correlate to some kind of financial calamity. The exceptions are 1966, which was just a bad year for stocks, and 1941, the dawn of World War II. The very worst years (1931, 1937, 2008) correlate with the start and middle of the Great Depression, and the recent Great Recession”.
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