The Russian equity market is highly correlated to the price of crude oil. Since Russia is one of the largest oil producers and exporters in the world, Russian stocks perform well when oil prices are high. Conversely declining oil prices leads to lower equity prices. The chart below shows the close relationship between Russian stock …
Continue reading ‘On The Correlation Between The Russian Equity Market And Oil Prices’ »
Pullbacks are normal in equity markets. Over the long-term stocks tend to always climb a wall of worry and yield positive returns. So short-term corrections should not surprise long-term investors. Generally stocks go up when considered over many years. To put it another way, though corrections occur every now and then, stocks yield positive returns …
Continue reading ‘Corrections Are Normal in Equity Markets: Australian Example’ »
Pullbacks are common in equity markets. In any given years stocks tend to go up and down for any number of random reasons. Just because stocks have had declines in a year does not mean they will have a negative return for that year. Even when stocks have had big declines they have soared back …
Continue reading ‘Largest Declines and Annual Returns of Global Stocks’ »
Volatility is back in the equity markets with a vengeance. After years of calm and rising markets even a small decline of 2-3% feels like a major fall. Some investors may wonder if we are heading towards a bear market. Even if a corrections turns into a bear market, bear markets usually do not last …
Continue reading ‘S&P 500: Bear and Bull Market Price Returns’ »