Which Investments Worked 40 Years Ago When Inflation Was This High?

I just returned home from London, where I was attending and speaking at the AIM Summit, which stands for Alternative Investment Management. Over $10 trillion in assets under management (AUM) were represented among the hundreds of institutional investors, family offices, fund managers and more who were in attendance.

One of the most valuable benefits of taking part in this international summit is the unique insight you receive from global leaders.

I had the pleasure of speaking with Ali Jehangir Siddiqui, Pakistan’s former ambassador to the U.S. during the Trump administration. He shared with me his first experience meeting the president, who eschewed formalities and traditional protocol in favor of getting right down to business. The U.S. would withdraw millions in aid, Trump told Siddiqui, if Islamabad didn’t do more to combat terrorists and militants.

I also had the opportunity to catch up with my friend Robert Friedland, founder and co-chairman of Ivanhoe Mines, one of our favorite copper producers. Robert told me a power vacuum could soon open up in both Russia and China, as both leaders may be seriously ill. There’s speculation that Vladimir Putin could have cancer, while Xi Jinping may be suffering from a brain aneurysm that the Chinese leader is choosing to treat not with surgery but traditional Chinese medicine.

If true, it may not be long until we see a dramatic shift in the world order.

Of Bulls and Bears

After today’s close, the S&P 500 is off about 20% from its all-time high set in early January, putting stocks in bear market territory. This being the case, I wanted to revisit the historical bull and bear markets from the past 50 years to see how much they rose or fell by, respectively.

Between 1973 and today, there have been six bear markets, the average decline being 41%. The worst of the five bear markets took place from October 2007 to March 2009 when stocks decreased about 57%.

If this sounds bad, I hope the bull market chart helps brighten your mood. Over the same period, there were five bull markets. Stocks rose 227% on average. The strongest bull market occurred roughly from 1987 to 2000, gaining a phenomenal 582% before crashing due to the dotcom bubble.

S&P 500 Bull and Bear Markets Since 1970