Meme Stocks, Bored Monkey Pictures, Digital Pokémon

“The real problem is that a decade of experimental distortion encouraged unprecedented speculation in every conventional asset class, not to mention fringe speculation in assets detached from any standard of value, including meme stocks, pictures of bored monkeys, and digital Pokémon posing as ‘currency.’ As with every similar episode across history, the unwinding of this bubble in the form of financial crisis is already quietly baked in the cake.”

– Dr. John Hussman, “Central Bankers Wandering in the Woods” September 2023

Today we update Treasury bond and U.S. stock market forward return estimates.

Treasury bond return estimates are very easy. It’s simply the current yield offered by the bonds… assuming the U.S. government doesn’t default of course. Here are the current annualized yields for various maturities: Continue reading “Meme Stocks, Bored Monkey Pictures, Digital Pokémon”

Believe It or Not: Stocks go Up AND Down

There seems to be a lot of shock out in the world that markets are down as if people have forgotten stocks don’t go only straight up but also go down. I certainly understand it from younger investors who have really never been through a bear market / recession before, but I’m surprised to see so many more experienced people also caught off guard.

The reality is out of the 97 years from 1926 through 2022, the U.S. stock market was up 71 of those and down the other 26 years. That means, on average, stocks lost money in 1 of every 4 years. Continue reading “Believe It or Not: Stocks go Up AND Down”

First Trust: Stocks and Bonds Falling Together: What Happens Next?

Today I received a chart from First Trust with very interesting information.

The chart shows all the quarters since 1976 where stocks and bonds declined together and then provides forward return data for the subsequent 6 months, 1 year, 3 years after each event.

I’ll share the chart below then point out a couple things I find noteworthy. Click on the chart to expand…

Continue reading “First Trust: Stocks and Bonds Falling Together: What Happens Next?”