Since that first trough in 1877 to October 2026:

• Secular bull gains totaled 2,615% for an average of 436%.
• Secular bear losses totaled -338% for an average of -68%.
• Secular bull years total 97 versus 60 for the bears.

This last bullet probably comes as a surprise to many people. The finance industry and media have conditioned us to view every dip as a buying opportunity. If we realize that bear markets have accounted for 38% of the highlighted time frame, we can better understand the two massive selloffs of the 21st century.

DYI:  I’ve been pounding the table for far longer than I care to admit stating adamantly that U.S. stocks being massively (my favorite word) overvalued has continued to climb ever higher.  Of course it is well known that valuations are a poor short term indicator for future stock prices.  However, what we do know is that over the long term stocks will not only regress back to their mean they will overshoot lower thus creating its long term mean mathematically.

My best guess is when the bear emerges we’ll have a redo of 1968 to 1982 roller coaster – inflation adjusted – decline of 60% to 85% from a combination of nominal decline and high inflation reducing returns significantly. 

Both political parties are responsible for all of the excessive spending, which in turn forces the Federal Reserve to buy up a portion of treasury securities.  This digital money printing is causing inflation it is the trade off to keep interest rates from rising significantly. 

In other words, unless Congress' and President(s) get that old time religion and reign in spending, inflation will continue within the 4%+ range crushing returns for stocks along with their eventual decline within more normal or bargain level valuations.

Till Next Time