Despite a 55% rally in stocks since the March low, history shows us that a move higher might be much more difficult. The Dow Jones Industrial Average has experienced just two declines that are comparable in size and scope to the most recent decline. In both circumstances stocks rallied over 50% from their lows and then struggled sideways for nearly a full decade afterward. Considering the excesses we’re dealing with, it wouldn’t be shocking to experience something quite similar over the course of coming 5-10 years:
Click for larger image
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.