Chart of the Day
Someone sent me this chart, which I thought was fairly interesting. It shows the stock performance during recessions dating all the way back to 1926.
The most interesting stat is the one that shows how much the market bounces from its low to the end of the recession. That means, that on average, the stock market bounces +25% before the recession is even over.
The hard part, of course, is figuring out both when that low in the market is, as well as how long the recession will last.
I think the declines over the last year have discounted a ton of economic weakness already. Moreover, the historic amount of stimulus that has been thrown at the markets and the economy will, in my opinion, achieve their desired effect.
I just think that most people are not willing to give these programs the appropriate amount of time to kick in and work. Heck, I like instant gratification as much as the next guy, but these programs always work with a lag time, not immediately. For this reason, I think that 2009 will be a much different year in the stock market than 2008.