Major Declines and Recoveries in US Equity Markets: Chart

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Market declines are common in equity markets. Stocks do not always go up forever. Bull markets are followed inevitably by bear markets and vice versa. They key point for investors to remember is that when stocks decline it is important to stay the course and not bail out. Unless absolutely necessary it is never a good idea to liquidate stocks during bear markets and move to cash. In fact, selling at huge losses only leads to missing out on huge upward moves which is often sharp and dramatic.

The following chart shows the major bear markets in the US markets and the strong recoveries that followed:

Click to enlarge

Source: Market Declines: A History of Recoveries, MFS

Related ETFs:

  • SPDR S&P 500 ETF (SPY)
  • iShares Core S&P 500 ETF (IVV)
  • Vanguard S&P 500 ETF (VOO)
  • SPDR Portfolio S&P 500 ETF (SPLG)

Disclosure: No positions

Why Australian Investors Need To Invest In International Markets

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One of the strategies for Australian investors to earn higher returns is to invest in overseas markets. Simply going with Australian domestic equities is not the best idea since markets aboard can yield better returns. In addition, it also offers diversification benefits. The Australian economy is mainly composed of old economy sectors. The major sectors are Mining, Finance, Health & Education, Manufacturing and Construction according to RBA. The tech sector for instance is not a top sector. Accordingly, the IT sector is just 2.4% of the ASX 200 index as shown in the chart below:

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Source: S&P

One of the international markets Aussie investors can consider is the US market. The S&P 500 has trounced the ASX 200 index by a wide margin especially in recent years. The following chart shows the performance of the ASX 200 vs. S&P 500 from June, 2013 to June, 20222:

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Source: Reuters, CommSec
*10 year comparison based on monthly data ending 30 June 2023. The chart shows the relative performance of the ASX 200 Index (red) compared to the S&P 500 Index (green) In order to compare like for like, both indices have been rebased to a starting value of 1.

Source: CommSec

The huge difference in returns cannot be understated even with taking into account factors like foreign exchange rates, fees, etc.

Related ETFs:

  • SPDE S&P 500 ETF (SPY)
  • iShares Core S&P 500 ETF (IVV)
  • Vanguard S&P 500 ETF (VOO)
  • SPDR Portfolio S&P 500 ETF (SPLG)
  • iShares MSCI Australia Index Fund (EWA)

Disclosure: No positions

The Top 10 Countries With The Largest Gold Reserves 2023

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Gold is considered as a safe-haven asset class. During periods of uncertainty and chaos in the equity markets investors tend to flock to gold. Though gold does not generate income like equities and other assets, they offer hedge against inflation and traditionally has held its value over the long-term. Gold has been a prized asset to own since the early days of human civilization. So its no wonder that governments own lots of gold. The top 10 countries with the largest gold reserves in 2023 is shown in the infographic below. The US tops the list followed by Germany and Italy.

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Source: In Aurum We Trust: Which Countries Have The Biggest Gold Reserves, Sputnik

The only developing countries in the above list are China, India and Russia with all of them increasing their reserves relative to 2018.

Related ETF:

  • SPDR Gold Trust (GLD)

Disclosure: No positions

Knowledge is Power: BRICS, Paycheck-to-Paycheck, Credit Card Debt Edition

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US stocks have performed very well so far this year. The S&P 500 is up by about 18% year-to-date. Inflation, debt and other factors seem to hardly impact the markets adversely. Investors are focusing on the good news and ignoring the bad news. It remains to be seen how long this can last. From AI to EVs the hype is almost constant. With that said, below are a few interesting reads for the long weekend:


Miniature Stadium, Miniaturk, Istanbul, Turkey