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Strategies & Market Trends : The Residential Real Estate Crash Index

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To: stockman_scott who wrote (196347)4/14/2009 11:21:49 PM
From: Les HRead Replies (2) of 306849
 
The economy turned up almost a year before the October 2002 low.

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From July 2007:

What's next for the market? If Leuthold is right, the next step is a bear market but not a catastrophic one. On average, the stock market suffers a bear market -- defined as a drop of 20% in major indexes, such as the S&P 500 -- every four or five years. During an average bear market, the S&P loses about 25% of its value. It usually takes 11 to 18 months for the market to hit bottom.

Every generation, investors suffer a cataclysmic bear market. In both the 1973-74 and 2000-02 bear markets, stocks plunged almost 50%. During the Great Depression, the market was down 89% at its worst.

But Leuthold expects the declines to be tempered this time around. First, stocks aren't ridiculously overpriced, as they were in early 2000. And although economic growth appears to be slowing, the most recent figure on the pace of expansion showed the economy to be quite healthy, thank you (gross domestic product expanded 3.4% in the second quarter). "Besides, we just had one of those big bear markets," Zender says.

kiplinger.com
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