Major Crisis Events Since 1940 and US Stock Market Returns

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The Russian invasion of Ukraine will go down in history as one of the major crisis events of the 21st century. For more than two years the world has been dealing with disastrous impacts of Covid-19. Though the pandemic has not ended in any way, Russia decided its the best time to start a war on Ukraine. Almost overnight the world’s attention has shifted from Covid-19 to this new war.

According to an article by Dr.Shane Oliver at AMP Capital, there is a long history of major crisis events that impacted equity prices. In almost most of these cases, initially the stock market fell sharply only to rebound in the following months and years. Since World War II, the average decline for US stocks has been 6%. But six months later stocks were up by 9% on average. And the returns were even better after 1 year at around 15%.

The following table shows the major crises since 1940 and the performance of US stock market later:

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Source: The escalation in Ukraine tensions – implications for investors by Dr.Shane Oliver, AMP Capital

Comparing the Military Might of Russia and Ukraine: Infographic

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The Russian invasion of Ukraine is now on Day 5. Though it is too early to conclude anything, it appears the war is not going as planned for Russia. An article at The Guardian discusses a few of the early mistakes by Russia particularly the limited use of air force. With that said, the military forces of Ukraine is much smaller than of Russia. The following infographic from Radio Free Europe/Radio Liberty shows a comparison of the military might of the two countries:

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Source: RFE/RL Infographic

The Composition and Key Indicators of the Australian Economy: Infographic

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The Reserve Bank of Australia has published the updated snapshots of the Australian Economy. The following two are interesting with data as of Feb, 2022.  The composition of the economy shows that natural resources account for about 69% of exports and the largest export market is China. The average price of a residential dwelling at A$864K is shocking. Inflation at 3.5% is lower than the rate in the US. The Unemployment Rate is also low at 4.4%.

The Composition of the Australian Economy:

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The Key Indicators of the Australian Economy:

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Source: RBA Snapshots, The Reserve Bank of Australia; Hat Tip: MarketIndex