Bulls vs. Bears: Does the Economy Matter?

I haven’t written a Bulls vs. Bears post in a while. Given the tremendous stock market run from the end of last year through the end of the first quarter of this year, it seems like a good time to assess the current position of the markets. I recently read two articles which, on the surface, appear to make inverse arguments.

One article says that stocks are the place to be even if the global economy slows. The other makes the case for historically low stock market returns over the next decade – whether the economy recovers or not. I think there may be more common ground here than a first glance would indicate. Let’s take a look at each argument and see if we can draw any conclusions.  Read More…

This article has 13 Comments

  1. Gary

    Although i can understand both points of views it is foolish to think that we are anywhere near outside the recession and recovering. We are merely in the eye of the storm.

    The US has not really fixed their financial problem. They simply used the media to claim it was fixed but when you loko at the legislature they just are allowing everything to be the same.

    In other words, their banks can still do crazy bets and take down the world economy.

  2. Luciano Mignot

    The article is correct in its assertion that both viewpoints are correct despite seemingly on the surface being at odds with each other. That is how i read it.

  3. Daulton Douglas

    I think its humorous that it mentions that a strengthening housing market is a good sign for improving times. Wasn’t it the housing market that caused the recession in the first place? Or more specifically, the lack of regulation, which allowed sub-prime home buyers to get mortgages with no restrictions.

  4. Joesph Seidner

    Harper and his cabinet are not doing a good enough job. Although our economy is improving, i believe it is an illusion and the real damage will be more pronounced in a few years due to Harper having a majority government to do whatever he wants.

  5. Stacey

    The smartest approach anyone can do to get out of this rat race is to buy into index stocks and hold them for years. Yes the markets will fluctuate but over several years they will rise. Investing in any other way is plain rolling the dice.

  6. BondsMan

    Hussman’s analysis is spot on. And it is frustrating to think that only a 4% return for equity trading for the next 10 years is in our future.

    I recall a time when banks would routinely offer a minimum of 4% for savings accounts. Today we’d be lucky to get 1%. I’ve been a long time active trader with Questrade and although i am still charting 10% returns as a whole,for ytd things have not been going as well and i am strongly considering moving my returns to a more stable investment.

  7. Holden B.

    All I know is if whatever it is involves Apple Inc. it is always a good time to buy shares!

  8. Garth M.

    Most emerging markets continue to grow in the cell phone (wireless) industry. So this piece is correct in that regard.

  9. Kayden L.

    Bull Market? Seriously? That is being way too optimistic. At best its more like cauciously optimistic. Here in Canada we have been weathering the economy better than other countries but lets never forget that economies are global; and so, like dominos, if there is a disaster somewhere else it will likely butterfly-effect onto us.

  10. Jed Odell

    Uhh, because the US unemployment has fallen this is in no way a sign of a bullish market. If you look closer the unemployment #s doesnt necessarily mean people are back to work but merely people who have stopped receiving unemployment benefits (either because of their limits or no longer filled out the application).

  11. Dionte Pine

    The market is in a bullish-bearish trend right now. And this is a perfect lesson as to why you need to always diversify your portfolio and buy-and-hold. No one can predict markets with full certainty and so to better control the damage one should always look to keep a basket of industries.

  12. Woodrow K

    John Hussman is a financial genius. I’ve followed him for years. Take what he says seriously. He is as close to a prophet as you can get.

  13. Jerod A

    This may come off as silly but why do they call it “bear” and “bull”. They both are vicious animals and so i fail to see why a bear means a decline while a bull means a rise.

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