I’m generally not a big fan of picking a few recessions out of a hat in order to compare them to the current recession (particularly considering the de-levering nature of this recession), but these charts are interesting nonetheless. Although bubble bursts rarely repeat themselves the price action does tend to rhyme. On the back of a massive market implosion and the subsequent rally you have to wonder if Goldman Sachs isn’t right when they say that 2010 might just rhyme with the ultra boring investment year of 2004. As you can see in the following chart, the last 4 major market crashes were all followed by major downside or sideways movement at this point in the rally:
Mr. Roche is the Founder and Chief Investment Officer of Discipline Funds.Discipline Funds is a low fee financial advisory firm with a focus on helping people be more disciplined with their finances.
He is also the author of Pragmatic Capitalism: What Every Investor Needs to Understand About Money and Finance, Understanding the Modern Monetary System and Understanding Modern Portfolio Construction.