Where do we go from here?

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RYAN   By Guest Blogger Ryan Lewenza
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It’s official! The S&P 500 has now experienced a bear market decline of 20%, coming in relative quick succession to the 2020 pandemic-induced bear market.

With this week’s big mid-week decline the S&P 500 and TSX are down 19% and 5%, respectively, year-to-date (ytd). While we were calling for higher market volatility this year as a result of the Fed rate hikes, we definitely didn’t envision a 20% bear market unfolding.

We can thank, in part, Tsar Putin for this market decline as it’s my belief that the Ukraine war is having a material impact on the equity markets as a result of the hit to global GDP and how it’s exacerbating the high inflation problem. Essentially, this terrible war is amplifying the volatility and downside across the capital markets.

At its crux the equity markets are trying to determine whether the Fed rate hikes, the Ukraine war, and lockdowns in China will lead to a US/global recession. This is the million dollar question.

We did get some good news on the China front this week with the government starting to roll back some of the restrictions and with a projected full reopening date of June 1. I’m expecting a good bounce back in economic activity in the second half as the Chinese economy fully reopens, which could alleviate this concern. However, until we get clarity on the inflation/Fed rate hikes and Ukraine, the markets are likely to remain volatile in the short-term.

Today I’m going to review the data around past bear markets to see what insights we can glean on when this bear market may run its course. This post is pretty data heavy so my apologies in advance.

First, we’ve had it pretty good over the last three years in the markets and portfolios and nothing goes straight up. These selloffs, while hard and stressful, help to blow off the excess, get us back to long-term trend, and set us for a future recovery and ultimately new market highs. Equity markets always recover because of human progress and our collective ability to figure things out, generally speaking.

So, when markets are good for an extended period we forget that corrections occur and, in fact, are pretty normal occurrences. The chart below speaks to this. I provide the annual returns for the S&P 500 (green) along with the maximum decline or drawdown (blue) in each year. Since 1980, the S&P 500 has experienced an average decline of 14% in any given year. Some years it’s -5% like last year or -34% during 2020. But over the long-term the average intra-year drawdown is 14%, which is where we were to start this week.

The Average Drawdown for the S&P 500 is 14%

Source: Bloomberg, Turner Investments

No one likes these sell-offs and to see our net worth decline but it’s important to keep a few key things in mind – equity markets experience these sell-offs fairly regularly, and they always recover from bear market declines. Full stop!

So now that we’ve experienced a bear market decline of 20%, where do we go from here?
As I covered in a recent post I don’t believe it’s inevitable that the US economy is going to fall into recession. If we get the ‘soft landing’ that I’ve been calling for, then I believe we could be getting closer to the bottom given that the S&P 500 has experienced the typical or average drawdown in a year.

If in fact the US/global economy falls back into recession, then there likely could be more downside before this bear market fully runs its course. Below I include a table of every bear market since WW2. I further break up the bear markets into non-recession and recession bear markets. Recession bear markets are the worst with an average decline of 35% peak-to-trough.

Non-recession bear markets fall a gentler 24% on average. When looking at all bear markets the average decline is 30% so that would put us roughly at 2/3rds of the decline if there is a recession.

Historical Bear Market Declines for the S&P 500

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Source: Bloomberg, Turner Investments

So that’s the bad news. Now fast forward and focus on what happens following bear markets. We’re so caught up in the present that we can’t see into the future and the inevitable recovery that will unfold.

In the table below I continue with the data dump and analyzed how long it took to get back to even and stock market returns following bear markets. Looking at the last 12 bear markets it took on average three years to get back to even following bear markets. Markets always recover. It’s just a matter of time.

More importantly, the returns following bear market lows are phenomenal and why investors need to remain invested to take advantage of the future recovery. On average the S&P 500 is up 42% and 59%, one and three years later, respectively. And note how the S&P 500 was positive every single time one and three years after the bear market low. So based on this extensive data set, 100% of the time the S&P 500 is up following bear market lows and is up big.

Historical Recoveries from Bear Markets for the S&P 500

Source: Bloomberg, Turner Investments

So there you have it.

It’s been a tough go in the markets this year and in fact is the worst start for the S&P 500 since 1939. It’s our contention that the unjust and unprovoked invasion of Ukraine, along with the lockdowns in China, have greatly contributed to the current market volatility and declines this year.

We’ll find out in the coming months whether these factors will lead to a global/US recession. But today’s post is to provide readers a potential roadmap of what may unfold in the coming months and most importantly to emphasize that: 1) bear markets end; and 2) recoveries from bear markets always occur so stay invested, turn off the TV, avoid looking at your account balance and enjoy the summer days. And maybe a few more ‘pops’ or whiskeys to get you through this challenging period wouldn’t hurt.

The sun will rise again and so will the markets and your portfolio.

Ryan Lewenza, CFA, CMT is a Partner and Portfolio Manager with Turner Investments, and a Senior Investment Advisor, Private Client Group, of Raymond James Ltd.

 

120 comments ↓

#1 LewenzaCountry aka Prince Polo on 05.21.22 at 10:29 am

You should have called this post “Bear with me!”

Do you think that analysts are going to be bringing down their S&P500 earnings estimates in the back half of 2022?

Happy Victoria Day (May 2-4) weekend to all the beer-chuggin’ blog dawgs.

#2 Ponzius Pilatus on 05.21.22 at 10:36 am

The sun has risen 4 times in a row now in the
Lower Rainland.
Happy long weekend, everyone.

#3 crowdedelevatorfartz on 05.21.22 at 10:51 am

Another reason to hate Putin.

The only annoying thing is placing money this year (or next?) into an RRSP for the tax deferral or TFSA (tax avoidance) and then watching the value drop.
C’est la vie.

#4 Andrewski on 05.21.22 at 10:59 am

Excellent Ryan, no need to apologize for providing us with your erudite analysis.

#5 Watertower on 05.21.22 at 10:59 am

thank you Ryan. I really appreciate your “data heavy’ posts. This one is great in helping to frame the current market trend and “set expectations”.

have a great long weekend!

#6 Sail Away on 05.21.22 at 11:01 am

#98 IHCTD9 on 05.21.22 at 10:23 am
#10 I’m stupid on 05.20.22 at 4:04 pm

Sure there is a forever home… I’m in mine, small house on an almost 10000sq foot lot in a good school area. The only way I leave is in a body bag. Originally we bought the home to tear it down if we needed more space as the kids grew. After being here for a few years my wife and I changed our minds. Instead of building a larger home we’re going to keep it small and give our kids life experiences as they grow. Why burn through a million for extra space to clean, instead 20k a year for travelling to all corners of the world sounds better to us.

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More like “I’m smart”. When the bulls are running, you stay off the streets. There’s probably nothing wrong with your current place anyway. Pay it off and enjoy the cashflow blast when done. Small and paid for is hard to beat.

We’ve camped out in the bunker complex for 21 years now, 7 years worth of that mortgage free. Cost about .05X income to live here now all-in. That’ll drop again when (if) the kids take flight. It’d be irritating as heck to ever have to shoulder a mortgage again. Just forget about these 3-5K/mo. payments that have become the norm.

The old farm house ain’t a status symbol, but life is easy living here. That beats the heck out of keeping up with the Joneses.

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Yep, good plan and sort of likewise for us, since we don’t intend to sell. 16 years ago we found the perfect place but it looked like hell. Way overgrown, dated 1959 house, carpenter ants in the addition. Now it’s fantastic and only took 67,000 hours of (very satisfying) work.

#7 earthboundmisfit on 05.21.22 at 11:08 am

W-H-I-S-K-Y …. please!!

#8 Flop… on 05.21.22 at 11:09 am

I see Australia has a new boss this morning.

With all the line ups at the passport offices in BC, people sleeping on the streets to renew, I better keep on top of things.

Here’s my current schedule.

Canadian Passport expires 2026.

Australian Passport expires 2025.

Vaccine Passport expires, dunno, I never looked at it or showed it to anyone…

M47BC

#9 Chris L. on 05.21.22 at 11:23 am

Well, I did call this yesterday. 15% more to go 100% for sure. The inflation rate, and historical normalization of rates coupled with the future bull market already worked into valuations is more headwind than the catalyst war, China. Those are just the things that gave the market permission to correct.

It’s really not that hard to see things go. Not sure why the Turner reps didn’t spot this. Once Russia started moving troops in, they started the B.S. political machine excusing inflation as transient, and China adopting the covid zero (remember that! – just 2 weeks to flatten the curve bros!)…it was all obvious.

Anyone still out there worried about the climate too? Still invested in ‘renewables?’ People gonna people. Just watching this play out like a game of checkers.

Down 15%, then it’ll sit. Buy half way through the sit. Predicting the sit depends how fast rates normalize and that is a result of how fast they raise rates.

Nothing happens until rates normalize. So hang tight there.

#10 Sail Away on 05.21.22 at 11:32 am

Thanks Ryan! Good post.

It’s nice seeing net worth bouncing around all time highs, but is maybe even better at this life stage to cruise market corrections. And this is a good one.

My wife and I greatly enjoy finding good value at times like this for our own kids and 19 nieces and nephews. The 5 kids currently in university will finish undergrad (and maybe even law/medicine) with no debt due to good returns in registered plans. My wife thinks it’s tacky, but I look forward to their grads when I can slip the kids a crumpled envelope with several thousand in cash and ‘Shhh!’.

#11 Michael on 05.21.22 at 11:33 am

Great read! Thanks, Ryan! ZSP all the way.

#12 SHANE GALLANT on 05.21.22 at 11:38 am

This is not normal times..I don’t belive russia has whole lot do to with this downside. It’s our fraudulent governments how they mishandle our money. They should be giving back more to the people. It’s clears has day!

#13 THE DANDADA on 05.21.22 at 11:48 am

Putin didn’t inject trillions of dollars out of thin air into the financial system.

Stop blaming Putin!

#14 I don't know on 05.21.22 at 11:55 am

“First, we’ve had it pretty good over the last three years in the markets and portfolios and nothing goes straight up. These selloffs, while hard and stressful, help to blow off the excess, get us back to long-term trend, and set us for a future recovery and ultimately new market highs. Equity markets always recover because of human progress and our collective ability to figure things out, generally speaking.”

-This quote should be plastered on the wall of every investor out there.

But it won’t be.

Problem is, usually, perma bears have pschological issues that prevent them from seeing the good in the world. They have a hard time accepting that human progress will continue regardless. To them, the whole world is a scary place.

It doesn’t help that the echo chambers of social media have given these individuals access to whatever narrative they seek to validate their paranoia -with foreign actors, paid trolls, professional swindlers, and other whackjobs all too happy to exploit them.

It won’t matter in the end. That same paranoia, cyncism, fear, and greed is what will hold ultimately them back.

Another great post from our weekender Ryan.

IDK

#15 Quintilian on 05.21.22 at 11:56 am

“[ coming] months and most importantly to emphasize that: 1) bear markets end”

No argument there, but so do bull markets end, and the demise of this one was obvious to the amateurs, and somehow not to the professionals.

#16 Balmuto on 05.21.22 at 12:02 pm

In my opinion we haven’t had a real bear market since 2008/2009. The drawdowns we’ve seen since have been either too shallow or too short-lived to really qualify as bear markets. So we’re due.

The unique element in this current market is not that we’re going through a Fed tightening cycle but that we’re coming from a base of zero to an interest rate that will be much higher than anything we’ve seen since the crisis of 2008. With all the debt in the system there’s going to be major fallout from the tightening and we’ve only just seen glimpses of that so far.

Feels much too early for stocks to be turning a corner. Begun, this bear market has.

#17 I don't know on 05.21.22 at 12:07 pm

#4 willworkforpickles on 05.21.22 at 10:58 am

No! … you and yours are so caught up in the past you have no concept of the present or what’s to come in the future.

-What’s to come is more of the same, which is continued human progress, and people like you complaining the whole time.

IDK

#18 Jay (not that one) on 05.21.22 at 12:12 pm

The stock market during the middle of a global pandemic was significantly higher than before the pandemic. This suggests that the companies would be doing better despite the headwinds of the entire global economy being shut down by governments.

That’s absurd. Blaming Putin for markets finally regaining a little bit of sanity really makes me question any other analysis.

It’s like if I was selling you a used car. In 2017, the car was in pretty good condition. In 2018, the car was caught in a hailstorm and was tremendously damaged. Despite that you increased the price substantially. That’s insane. Then you come to your senses in 2019 and lower your offer a bit. I can try reading tea leaves to explain that it was the phases of the moon and venus’s transit through jupiter, but the reality was just that the car wasn’t worth what you were offering and it made sense for the price to drop.

Honestly, I wouldn’t be surprised to see the bear market continue, because you’re still offering me more for my beat up hail damaged used car than you were 3 years ago.

#19 Fruit Vendor on 05.21.22 at 12:22 pm

A well written post by Ryan, I appreciate his historical perspective on bear markets. Personally, and not to frighten investors, I do not see a short term turn-around in the markets. Many, and I mean many people are heavily in debt due primarily to the low interest rates we have experienced through the financial reset, covid. Prices of all goods has gone through the roof, food, fuel, you name it. A further example, I am a soft fruit farmer in the Okanagan region of BC. Last week I purchased a broad based insecticide, last price $482.00 per litre, this year $1,023.00 per litre. These price increases will of course further exacerbate food prices. Fuel is another, cost for fuel manifests itself in everything we do, shipping. Our politicians still seem to be beating the drum of, “all is fine continue on”. They have finally admitted that inflation is not transitory, da! We still seem to be focusing on items to make society happy/equal/fair. Life is not. How can Comrade Horgan announce a one billion dollar expansion for a museum upgrade and yet our health care, schools, road, water delivery systems, sewage treatment are all waning. Our governments have their heads in the sand. Rates are going up, markets do not like that. We are entering, in my opinion, an elongated period of downward pressure. ONE SHOULD PREPARE FOR THAT! That is it from the orchard, enjoy the long-weekend, China is working.

#20 Joe on 05.21.22 at 12:23 pm

Guys – Garth et al will never admit the rise and fall of the markets is correlated directly with easy money printing and 0% rates by corrupt fed banksters. If they did they’d have to admit their thesis as to why investing has been a good thing. That said, Garth will always blame rates for housing issues :-). Selective hearing.

Central bankers are not corrupt. Nor am I wrong. – Garth

#21 MaturedPro on 05.21.22 at 12:36 pm

-While we were calling for higher market volatility this year as a result of the Fed rate hikes, we definitely didn’t envision a 20% bear market unfolding.- and you still charge 1 percent fee to manage other peoples money. Do not get me wrong, I like your analysis. But, you should have seen this bear market miles away and advised your clients accordingly.

#22 Dr V on 05.21.22 at 12:42 pm

“And note how the S&P 500 was positive every single time one and three years after the bear market low.”
——————————————————–

I’m drawing little graphs in my head and trying to figure out if this has to be by definition. A “low” implies a rising market afterwards. But if the current market crashes to a lower level than the 2020 bear, I guess your claim would still be valid. So not a very useful stat.

Looking at the table, I believe the better example is that bear market lows are at higher valuations than the
previous bear market lows except for two occasions.
Similarly, market highs are at higher valuations than previous highs except once, and another time very close. And some of the “bears” are quite bears, but very close.

Of course there are many smaller market ups and downs between.

Big picuture. 1949 13. 2020 3386.

#23 My Body My Choice on 05.21.22 at 12:44 pm

Being in the stock market the last couple of weeks has been un-BEAR-able.

But if you have some spare cash, and are feeling courageous, now is a good time to buy high quality stocks at a discount.

#24 Dr V on 05.21.22 at 12:58 pm

For some reason my browser isnt re-loading the first 14 comments but blog buddy Fartz asked about losing
money in the TFSA or RRSP.

I hate losing money in the TFSA because you cannot make it up. You are stuck with the same contribution next year and have to hope the investment comes back
in value.

A little different for the RRSP as you will get the full tax deduction at the start, and would pay less tax on the removal of the investment if it drops in value. And unless you have maxed out your RRSP, you can make up the “loss” by investing more later.

Maybe there are other factors I am not considering that
negate this effect.

#25 Karlhungus on 05.21.22 at 12:58 pm

Nobody likes sell offs ?

This guy loves em. If you’re in the accumulation phase you should be loading up right now

#26 Tom from Mississauga on 05.21.22 at 12:58 pm

Without a MRNA vaccine (you know, science) China will never reopen. Remember not getting Covid, lockdowns, Justin and Dougie were more politically popular in Canada than abundance and freedom until Tamara rolled into town. Eastern Hemisphere look out, Western Hemisphere will be fine.

#27 Ponzius Pilatus on 05.21.22 at 1:01 pm

A bear is sniffing around a tent with two guys in it.
One guy is putting his Nike sneakers on.
The other guy says: You can’t outrun a bear.
“I only have to outrun you” replies the guy with the Nikes.

#28 macduff on 05.21.22 at 1:04 pm

Ryan,
This is an excellent post, with important data on past market downturns.
As a recent retiree, do you have any suggestions for someone who is currently withdrawing income from their portfolio as the market drops?

#29 erik mtl on 05.21.22 at 1:07 pm

Thank you for the detailed and thorough analysis! I am of the opinion that as long as humans are still humming and hopping around, then creation and economic activity will continue. So no need to worry about one’s portfolio too much. Although I wonder if we are experiencing the “The Great Stagnation” now (https://www.amazon.com/Great-Stagnation-Low-Hanging-Eventually-eSpecial-ebook/dp/B004H0M8QS ) Could it be longer rebound than usual this time around?

#30 Adam on 05.21.22 at 1:26 pm

Hi Ryan. This is a great post, really appreciate it. The only thing I would like to see is on your final chart a “Years to Breakeven – inflation adjusted”. In other words, how many years would it take to break even with inflation factored in? If you do this, it gets bloody really fast. For instance, using a US inflation calculator, the cumulative rate of inflation from 1973 to 1982 was a (SHOCKING??!!) 117%. So someone who invested in the stock market in 1973 at 120.24, and looked at their stock portfolio in 1982 when it was 102.42 would have not only been down about 15% on their investment, but also close to 107% down due to inflation. So they would need their stock to hit around 260.92 in 1982 to break even, but it was actually at 102.42. In reality that person probably didn’t break even until 1987 or so, which would be about a 14 year period. And even then that is just breaking even with inflation, no growth. Now of course I am cherry picking absolute highs and absolute lows in retrospect and likely very few people purchased at these highs and held until these lows (without dollar cost averaging) but it DOES happen. For instance, there may have been someone who got a large inheritance of, say, $1 million and they dumped it all into the stock market in Jan 2022. They could potentially not break even on that for a decade if we enter a recession plus inflation remains high. Even dollar cost averaging wouldn’t have totally saved this person, if they had DCA’d from, let’s say, Jan 2021 to Jan 2022, buying 1/52 every week of the million dollars. I do think the 70’s are a reasonable comparison to what we are going through today (better comparison than the dot-com bubble or the 2008 recession) because of oil prices and inflation.

#31 Miller on 05.21.22 at 1:27 pm

Are you Chrystia Freeland or what? Blaming Putin?

The TSX is heavily skewed towards energy and natural resources, which are in a bull run THANKS TO PUTIN.

Suncor, Imperial Oil and the Potash industry should be having idol worship of Putin’s likeness and image for what he has indirectly done to energy and fertilizer prices.

#32 Keith on 05.21.22 at 1:41 pm

Based on the history of the Fed, the odds of a soft landing are 25% or less. This inflation is difficult to analyze, and market volatility shows there’s some variety of opinions on how it will play out. Recession looms large.

#33 Leo Trollstoy on 05.21.22 at 1:45 pm

If you don’t want to invest when prices are down it means that you prefer to buy only when prices become more expensive

Which means you’re an idiot

#34 Doug in London on 05.21.22 at 1:49 pm

I’ve been hearing and reading a lot of doom and gloom about this supposedly bear market. I’m invested mainly in bore you to tears stuff like banks, utilities, REITs, and uranium stocks and ETFs, the kind of boring stuff that Gordon Pape would approve of. While they’ve dropped slightly, it’s nowhere near 20% down. It’s another tempest in a teapot. Once again I’m disappointed, as I was looking to score some good Boxing Day sales.

#35 Tom from Mississauga on 05.21.22 at 1:50 pm

BTW Tianjin the 3rd largest port is beginning mass testing, the 1st and 2nd are mostly closed due to Covid.

https://youtu.be/I1UM3894a6A

#36 Poutine on 05.21.22 at 1:58 pm

A simple look at various commodities charts shows inflation was way up long before Ukraine.

S&P500 was already down 10% on the year before Ukraine.

The fed provided clarity on rates, repeatedly. They will keep raising rates with the knowledge stock markets will go down.

#37 Philco on 05.21.22 at 1:58 pm

#14 THE DANDADA on 05.21.22 at 11:48 am
Putin didn’t inject trillions of dollars out of thin air into the financial system.

Stop blaming Putin!
———————————
I think Ryans means supply chain disruption’s.
When he started that stupid war I said to the wife, this maybe the biggest little war we ever see.
Major bread basket area and energy suppliers. When there is no elasticity in energy, food supply and other things… POOF prices sky rocket and fear and hording begins as well. Chinas doing it. Its affecting everything.
Part in parcel with you know who pooping on pipeline’s and the oil patch.
Perfect storm. Stocks will have a tough year I do believe.
I always take the stance we have fools running the show so I’m loaded for bear always.. All good here.
https://www.theguardian.com/world/2022/may/19/ukraine-war-has-stoked-global-food-crisis-that-could-last-years-says-un

#38 Søren Angst on 05.21.22 at 1:59 pm

Oil started shooting up in price long before Putin invaded or the US warned about that.

https://www.macrotrends.net/1369/crude-oil-price-history-chart

I noted that since I check for Contango at least once per week.

Price crashed with Covid. Supply side throttled back.

Covid over. Quick rebound in consumption. Oil supply hasn’t kept up with recovering demand.

Putin and his war has not helped nor OPEC for that matter.

E.g., EU went to OPEC for more oil and they refused.

So you got that part wrong.

#39 Don on 05.21.22 at 2:02 pm

To I don’t know….. Human progress is the fallacy

#40 crowdedelevatorfartz on 05.21.22 at 2:15 pm

@#28 Ponzies Puns
“I only have to outrun you” replies the guy with the Nikes.”

+++
True story.
About 30 years ago there was a group of big game hunters in Alaska.
A German, an Austrian and a Czech.
They were camping one night when they were attacked by some Grizzlies and the Czech, unfortunately, was carried off into the forest and eaten.
The other two hunters contacted the Alaskan Wildlife service to attend the site investigate what happened and help them recover their friends body.
The Game wardens arrived, looked at the evidence and they decided to track down they bear that killed and ate their friend.
Eventually the wardens and the two hunters tracked the group of 4 bears to a small clearing in the woods and the Warden immediately shot the large male bear and let the other 3 bears ( a sow and two large cubs) to run off.
They cut open the bear and there was their unfortunate friend.
“How did you know our friend would be in THIS bear and not the other bears?” the Austrian asked.
“Easy” replied the Warden, ” The Czech is always in the male.”

#41 I don’t know on 05.21.22 at 2:17 pm

Quintilian on 05.21.22 at 11:56 am

Did you read the column? I have my doubts.

You are right about this bull, which is why this entire column talked about not only what a bear market looks like, but more importantly what comes after it for people smart enough to stay invested and not make rash decisions…like amateurs who loaded up on leverage, or who spend too much time on social media.

This column is actually to help amateurs like you.

IDK

#42 Ryan Lewenza on 05.21.22 at 2:18 pm

LewenzaCountry aka Prince Polo “Do you think that analysts are going to be bringing down their S&P500 earnings estimates in the back half of 2022?”

Yes but not materially. Currently consensus is for around 15% yoy growth, which is twice the long-term average. Maybe it’s revised down to 12-13% by end of year, but still decent. Conversely I see positive revisions to TSX earnings on the back of higher commodity prices. – Ryan L

#43 Søren Angst on 05.21.22 at 2:19 pm

Long road to haul for recovery is what you’re telling me.

Damn. I was having such a nice day.

BTW, in your Blog a while ago (the coming year) you said eschew growth stocks, buy value stocks. Glad I listened to that. ✅

You recommended ETFs with dividends as well. Of course over achieving me went WHOLE HOG on that and man am I glad listened to that advice. ✅

—————–

I must tell you that I do not like “your” numbers 😉. BUT they are what they are and I think the same, 2 to 3 years of recovery.

Blame Covid for crashing demand, supply throttled back and then demand skyrocketed at everyone figured out they were going to live after all.

I said a while ago that it takes YEARS to build supply chains and fine tune them, it will take YEARS to rebuild them after Covid and add to that with Putin in the equation now (Russian, Ukrainian commodities).

You used numbers. I used logic for a “per se nota veritas”.

PS:

Thank you for the advice on value + dividends you gave, GRAZIE Ryan.

Still, I don’t like your number today, sorry. But I don’t. I can’t imagine anyone that does (well, deep pocketed Short Sellers?).

#44 Ryan Lewenza on 05.21.22 at 2:21 pm

willworkforpickles “No! … you and yours are so caught up in the past you have no concept of the present or what’s to come in the future.”

If you feel this way then why do you come here? Ryan L

#45 Ryan Lewenza on 05.21.22 at 2:23 pm

Miller “Are you Chrystia Freeland or what? Blaming Putin?
The TSX is heavily skewed towards energy and natural resources, which are in a bull run THANKS TO PUTIN.”

Canada is the 9th largest economy and represents just 3% of the worlds market capitalization. The US going into recession is more important to Canada than high oil prices. But I am bullish on the TSX. – Ryan L

#46 The joy of steerage on 05.21.22 at 2:24 pm

#11 Sail Away on 05.21.22 at 11:32 am
Thanks Ryan! Good post.

It’s nice seeing net worth bouncing around all time highs, but is maybe even better at this life stage to cruise market corrections. And this is a good one.

My wife and I greatly enjoy finding good value at times like this for our own kids and 19 nieces and nephews. The 5 kids currently in university will finish undergrad (and maybe even law/medicine) with no debt due to good returns in registered plans. My wife thinks it’s tacky, but I look forward to their grads when I can slip the kids a crumpled envelope with several thousand in cash and ‘Shhh!’.
….
Surely some priceless whale art would have been better.

#47 Barb on 05.21.22 at 2:26 pm

That is one ugly dog pictured today.

#20 Fruit Vendor
“…How can Comrade Horgan announce a one billion dollar expansion for a museum upgrade and yet our health care, schools, road, water delivery systems, sewage treatment are all waning. Our governments have their heads in the sand.”

——————————–
I hate to agree with Falcon but Horgan’s $798 million museum upgrade is so typical of NDPers platforms. Horgan will be tarred and feathered if he goes ahead with this.
Deflect when the going gets tough.
Deflect people’s attention to something else.

It’s not a VANITY project, rather INSANITY.

By the way, I paid $2.97 for one medium sized red onion yesterday. I wouldn’t complain if I knew the farmers were getting the bulk of the increase. But farmers never do.

#48 Ryan Lewenza on 05.21.22 at 2:26 pm

macduff “Ryan, This is an excellent post, with important data on past market downturns. As a recent retiree, do you have any suggestions for someone who is currently withdrawing income from their portfolio as the market drops?

First, if possible, try to reduce your spending/portfolio withdraws for this year. Second, have floating rate bonds to keep up with inflation. Third, assuming you have a balanced portfolio you could take a bit more from bonds this year and wait for the stock market recovery in the second half and into 2023.

#49 Philco on 05.21.22 at 2:27 pm

WAAAAHOOO Huawei’s gone.
Canadian telecom firms will be ripping it all out….HSPA & LTE
and no new purchases.
We should NOT be buying billions $ in that CCP crap.
We should not be enriching such a crooked country.
One that rolls into Hong Kong and crushes democracy and now eye balling Taiwan.
Chinas tech sector it hurting :-)
Don’t thank T2 for this our security departments forced his hand.

#50 DON on 05.21.22 at 2:36 pm

#15 I don’t know on 05.21.22 at 11:55 am
“First, we’ve had it pretty good over the last three years in the markets and portfolios and nothing goes straight up. These selloffs, while hard and stressful, help to blow off the excess, get us back to long-term trend, and set us for a future recovery and ultimately new market highs. Equity markets always recover because of human progress and our collective ability to figure things out, generally speaking.”

-This quote should be plastered on the wall of every investor out there.

But it won’t be.

Problem is, usually, perma bears have pschological issues that prevent them from seeing the good in the world. They have a hard time accepting that human progress will continue regardless. To them, the whole world is a scary place.

It doesn’t help that the echo chambers of social media have given these individuals access to whatever narrative they seek to validate their paranoia -with foreign actors, paid trolls, professional swindlers, and other whackjobs all too happy to exploit them.

It won’t matter in the end. That same paranoia, cyncism, fear, and greed is what will hold ultimately them back.

IDK
********

You seem to be projecting again. Ryan is talking about stock markets…housing plays out ain a DIFFERENT way. How’s the data analysis job with CREA going. Say hi to Honest Realtor and Sam for me.

#51 Linda on 05.21.22 at 2:36 pm

What a mournful looking bear blog photo:) Thanks for the analysis Ryan, much appreciated. While the invasion of Ukraine has indeed exacerbated supply chain disruptions & inflation the ‘Russia effect’ vis a vis the global economy isn’t that great. It is the USA & China that seem to have the greatest impact.

#52 Søren Angst on 05.21.22 at 2:37 pm

Central bankers are not corrupt. Nor am I wrong. – Garth

Agree. Canada is not a banana republic.

But admit it Garth, the EU, Fed and BoC dropped the ball on inflation. Kept pumping out cheap cash, kept rates HISTORICALLY low.

They dropped the ball, unforgivable.

Again this oil price chart:

https://www.macrotrends.net/1369/crude-oil-price-history-chart

Why I was biatching last year about enough already with the low rates. It will not end well.

If by Sept. 2021 the CB’s could not figure out demand was surging, supply struggling to keep up (and that was for everything not just oil), rampant inflation would result from post-Covid wounded supply chains then:

You are fat, dumb and happy…ASLEEP at the WHEEL. Light are on, but nobody is at home. 2 bricks short of a full load…etc.

Poloz * gracefully retired. Good. His acolyte Tiff * should as well.

The replacement, younger if you were to ask me (new ideas), can do no worse.

* Authors of Cdn RE, gas station and shopping cart misery.

#53 DON on 05.21.22 at 2:47 pm

#20 Fruit Vendor on 05.21.22 at 12:22 pm

The only analysis I can suggest about Mr. Horgan and his government’s Museum upgrade is it will sustain jobs in the expected downturn and create revenue as everybody likes to visit new shinny spaces. The two cruise ships alone will pack the museum.

Doctor’s are leaving due to the high cost of living and much better job prospects in the US. Who would not want to live and work in Hawaii over Victoria or Raincouver or the Smokanagan.

#54 Flop… on 05.21.22 at 2:49 pm

Just had an interesting exchange at the supermarket.

As I was putting my groceries in my backpack, the next customer started fuming when the cashier told her that her product had increased in price.

The lady only had $2.95 for some tetra pack type of product.

“ I don’t want it and I think you’re ripping me off” she blurted.

I asked the cashier how much she was short, 5 cents was the answer.

Then I found out I was expected to pay the tax and recycling fee or whatever on top, so I dripped some more shrapnel into the cashiers hand.

Might have got a few cents back as I held my hand extended, not sure, was too busy watching the steam coming out of this lady’s ears.

If she was flipping out over that, I’d have to imagine she doesn’t own a motor vehicle, because that’s the current thing that has more steam coming out of people’s ears than the clock in Gastown.

She did murmur a thank you on the way out, it was only a tiny gesture, but I did already forgo my favourite Icecream, and downgraded my luncheon meat because I didn’t think it was worth the extra expense.

We all got choices to make in these inflationary times.

Maybe people think I’m made of money when they see my Greaterfool Tramp Stamp…

M47BC

#55 Philco on 05.21.22 at 2:51 pm

I don’t get through all the stuff here but on fuel prices…Its been said before, Pandemic knocked oil into the negative.
Companies blew up, T2 killed Alberta and pipelines. Economy comes back. We rely on other country’s dirty oil and why!?
U.S., Saudi Arabia, Russian Federation, United Kingdom, Azerbaijan, Nigeria and Ivory Coast.
Its nuts….Trudeau is out to lunch. TAXES are redick on fuel.
Now the excavator burns $230 of diesel an HOUR!

#56 Quintilian on 05.21.22 at 2:57 pm

#42 I don’t know on 05.21.22 at 2:17 pm
“This column is actually to help amateurs like you.”

No thanks, I will pass up on the help.
Finance/economics is a human activity.
It can’t be understood, by the Commerce Faculty, no more than accounting understand the true drivers of business, i.e. sex, greed, fear- human emotions.

Stay in your cubicle.

Have you been buying on the dips btw?

#57 Extrauser on 05.21.22 at 3:03 pm

With a 20 percent drop in market, to come back it has to grow 25 percent to come back to original level ..with a 30 percent drop in market , it has to grow 42 percent to come back to original levels . Where are rhe gains .. hope i make sense

#58 willworkforpickles on 05.21.22 at 3:07 pm

#18 I don’t know

Complaining / complaints…?

Me…uh uh

Just what real economists see coming, well ahead of the pack mainstream economists don’t get until the gritty details finally work their way through the system. Today’s so called mainstream economists eventually get hold of the truth behind the facade of bs put up as a detraction and the truth as it really is comes out well after the real pro’s first come to know it.

Knowing well in advance what this economy is being built on and where its headed can hardly be misconstrued as complaining.

…and as usual..you don’t know but you have chosen the right name for yourself used to post comment here.

#59 Søren Angst on 05.21.22 at 3:15 pm

Off topic.

Levity for a heavy duty topic today.

The Sun (the real one from England, not the fake one from Canada) never one to miss a sex, drugs, rock ‘n roll opportunity:

Topless Ukraine war protester crashes Cannes red carpet

https://www.youtube.com/watch?v=Xk_EgFo-O_8

I don’t see what the big deal is.

The Festival is right next to Croisette Beach, so, like what did they think people were doing at the beach all of 100 m away? And that some might saunter in on the Festival.

From what I know of Italia beaches, she was probably Nordic or German.

I liked the tear away dress part & the growls.

And good for her protesting sexual violence against women during the war. Indeed.

#60 opee on 05.21.22 at 3:25 pm

Tell me something, want a big change in ottawa, so why are ndp and new blue party signs showing up on lawns? Once again voters have no strategy and will again water down to an alternative, a new majority governing party this time!

I don’t get it! Don’t you want inflation control, less government and let small business flourish, let corporations do better, to expand, and increase employment.
Most of all, be an example to the world how to maximize, encourage it’s resources and people. Stocks market will rise, earnings increase in all segments, housing expands, full employment and so much more.

That takes leadership, not by voting party line because you always voted that way, diluting the result, again!

Think about your vote, like you think about purchasing a stock, a fund, an account manager!!!!!!

#61 Shawn on 05.21.22 at 3:25 pm

Canadian Tire

Canadian Tire has been exceedingly well managed and doing great for decades. They are hungry and ambitious for more growth.

Right now it (share price) is cheap due to recession fears.

Grab their Triangle Card to save money in the store and grab some shares.

I don’t think you will regret it.

#62 JOHN PICKETT on 05.21.22 at 3:33 pm

I like your comment, Ryan: “Ukraine war is having an impact on the equity market”. The shorter the war, the sooner we can get back on tract. As such, Canada’s foreign policy should be the same as what we did in the Balkans war in the early 1990’s: an arms embargo on both sides. And, no billion dollar loans to either party which will never be repaid and up in a politician’s pocket. For a country like Canada that is self-sufficient in most foods and energy, it is criminal that food and energy prices are sky high. And, they will get worse as witness natural gas prices for next winter. This is not our war and it should not concern us. Our foreign policy should be to get both sides to the bargaining table to facilitate an end to hostilities. One can bet that there will be zero co-operation from Russia in the future to limit green house gases. They will be building coal fired plants left and right to supply cheap electricity to help re-start their economy. Meanwhile we will be getting expensive power from wind turbines and solar panels.

#63 Scott in Gibsons on 05.21.22 at 3:42 pm

No sense arguing about how or why we got here and if market timing is possible. We’re entering a period of buying opportunity and should focus on executing a plan. We’re fortunate to have Garth’s team to help us succeed in this.

#64 willworkforpickles on 05.21.22 at 3:45 pm

#45 Ryan Lewenza

“If you feel this way then why do you come here? Ryan L”
………………………………………………………………………………………………………

Hello Ryan
I have said many times, Garth’s (blog-casting) in regards to all things real estate are always interesting to me and have been since the late seventies from his Sun column days right up to the present.
I’ve always said his and his cohorts knowledge of all things regarding registered savings accounts are your strong suite.
Knowledge of all things with regard to the economy as it exists now in these unprecedented times as have not existed before is where all of you could use an update.
A number of posters here do hit on points you and your crew have missed, that economists in the know out there expound on. I know it. many of my posts have been flagged recently for bringing up some of those points. Many posters here staying silent of constructive criticism directed toward this blogs authors know it too.
I am only offering a little constructive criticism where this blog may do well by allowing points of view differing from your own at least until you have looked into the validity of what’s being said.
The world class leading economists out there are no fools, nor are they conspiracy theorists and should be given a modicum of attention rather than instant disapproval because what they are saying is new to you counter to media and mainstream thinking.
Its not such a terrible or serious thing at all. It’s just a blog and comment section to its readers after all.

#65 Old Boot on 05.21.22 at 3:47 pm

So many clairvoyants and economystics in the comments, claiming to have confidently predicted the current state of affairs now that much of the turmoil is in the rear view mirror.

Did you sell your casa at peak house?

Did you liquidate your portfolio at peak market?

Did you have cash ready to buy the dip?

No?

Thought not.

#66 The Regulator on 05.21.22 at 3:53 pm

If Canada were to develop her resources properly without all the politically correct naval gazing, government interference, nimbyites, what’s in it for me-ites, and woefully uninformed in general MSN worshippers, we’d be in pretty good shape.

#67 I don’t know on 05.21.22 at 4:07 pm

57 Quintilian on 05.21.22 at 2:57 pm

The short term market is not about economics but about emotion. Like you stated, fear and greed.

Long term it is more about human progress/economics, and that’s where the cynics, the paranoid, the gullible, and the psychologically damaged falter.

Fully invested as I have been for a long long time. Seen it all and heard it all before.

IDK

#68 an investor on 05.21.22 at 4:08 pm

Are you really blaming Putin for the stock market crash? Didn’t T2 attend a U2 concert in the Ukraine and get his picture taken with Zelensky on Mother’s Day? Sounds like a terrible war.

This pathetic blog is too woke to blame Biden or the CPC for the economic chaos western nations are currently facing and your TDS won’t allow you to admit that we had nothing but peace and prosperity when Trump was in the White House.

Anyone who went to cash after the stimulus money dried up is a genius. Change my mind.

#69 Mr Fox on 05.21.22 at 4:10 pm

Amazing post Ryan.
I was trying to find a correlation between the Rate Hike cycle and the fall of the market (S&P 500 mostly but the story’s the same for DJIA and Nasdaq), aaand no luck..
Rate hike cycle vs S&P500:
1. Feb. 1994 to July 1995: +13.8%
2. March 1997 to Sept. 1998: +32.6%
3. June 1999 to Jan. 2001: -5%
4. June 2004 to Sept. 2007: +30%
5. Dec. 2008 to July 2019: + 243.1%
Unfortunately I didn’t include the QE/QT data for these periods, but I assume it was more or less the same as today.
Can we however say that the speed by which the Central Banks are tightening their monetary policies is one of the main factors that scares investors?

#70 Km on 05.21.22 at 4:37 pm

My spouse is stressing as we finally got 60/40 with wealth simple over the oast two years. He keeps looking and I told him not too and just stay the course. Data is always a perfect way to help see the long term outlook instead of emotions, thank you for all the time spent in compiling it to us readers free of charge. I am sure like most of us your free time is limited.

#71 Summertime on 05.21.22 at 4:41 pm

#65 willworkforpickles on 05.21.22 at 3:45 pm

Yep,

We both along know that the stuff is hitting the fan and why, along with the the Guess bloggers and the author of the blog, I think political correctness to extreme degree is not healthy.

It is very strange to me why every attempt to point out to the obvious BoC mistakes and their sloppy actions is faced with strong rejection.

After all to fix a problem we need to recognize it first.

—————————–

As for Ryan’s point on US recession, this is the least of the problems. Recessions come and go.

The problem is with the extreme debt, very high inflation and very wrong monetary policies for a very long time along with hitting the wall on energy and food production and supply.

These are extreme and exceptional circumstances all coming at the same time and will mort likely result in the extreme impoverishment of the 90-95 % of the population/the proverbial sheeple.

Whenever you are, if not in the top 5-10 %, very hard times wait for you.

#72 Concerned Citizen on 05.21.22 at 4:49 pm

The Fed has bailed out stocks every single time they’ve had a downturn since 2009. As much as they’d like to, I don’t think they can do it this time. The optics of cutting rates and/or more QE when inflation sits over 8% would be pretty bad, even for them (this, the institution that has real rates at negative 7.5% and hasn’t even started tapering the ginormous balance sheet yet).

We are already starting to see multiples coming off their insane levels – reflecting of higher interest/discount rates. Still a ways to go on that front in my opinion. Now we need to see what happens with profits. Profit margins are historically high, and are usually the first casualties in a recession. If we throw a multiple of 18 times $200 trailing earnings, that puts the S&P 500 at 3,600. If a recession comes, I could see the S&P 500 trade back to the 3,000-3,400 range (3,400 being its pre-pandemic all-time high). It would have to get really bad to go sub 3,000 IMO, and let’s face it, the Fed would probably step in at that point even if inflation were at 20%.

#73 Joseph R. on 05.21.22 at 5:05 pm

#38 Philco on 05.21.22 at 1:58 pm

From your Guardian link:

“Before the invasion in February, Ukraine was seen as the world’s bread basket, exporting 4.5m tonnes of agricultural produce per month through its ports – 12% of the planet’s wheat, 15% of its corn and half of its sunflower oil.”

This is huge and will impact the world supply of wheat and sunflower cooking oil.

With its farmland bombed and farmhand sent to war, Ukraine wheat production is 1/4 of what it was last year. That’s lost will be felt this year and the next as wheat supplies are used up. That mean, anything you buy at the grocery store that containing wheat flour will be impacted. You can’t just turn up the machine to produce more wheat.

Alberta will not able to save you; it uses a quaternary land rotation schedule between wheat, barley, canola and pulses (or rest).

#74 Bruce Z on 05.21.22 at 5:20 pm

>>> As a recent retiree, do you have any suggestions for someone who is currently withdrawing income from their portfolio as the market drops?
>>>>
Spend less, but use this lower market to withdraw more from RRSP – put the excess amount in TFSA or non-Reg account;
Money in RRSP will be taxed at full amount.
For 100K total value, take out in multiple years, 28% marginal tax rate, you will pay 28K tax; If market drop 20%, the total tax is 80K *28%= 22.4K; If the market goes up 30%, you will pay 130K *28% = 36.4K.
Use this bear market opportunity to withdraw more and let them grow outside RRSP.

#75 FO on 05.21.22 at 5:21 pm

“ projected full reopening date of June 1”

Small detail – the reopening will start on June 1, but will not be full at that point. Expectation is late June.

From Dep Mayor Zong Ming last week:

“ Third stage: June 1 to mid-to-late June. Shanghai will fully implement regular disease prevention and control and restore the normal work and life.”

Jing’an District just announced last night another 4 days of ‘silent period’ – all passes suspended, shops closed, deliveries stopped – to last four days. One may want to temper expectations of full reopening for a bit.

#76 Adam on 05.21.22 at 5:23 pm

What recession in Canada?

HEAR ME:

CANADIAN REAL ESTATE will NEVER GO DOWN. RECESSION-PROOF.

YOU HEAR ME PUNK?!

Don’t spread disinformation to drive down Canadian real estate. Only Russian trolls do that sort of propaganda.

#77 isleOfVanMan on 05.21.22 at 5:50 pm

hey willworkforpickles Nobody comes here for advice from you. You were a broken record proclaiming repeatedly at the onset of the Ukraine inavsion how the US dollar was guaranteed to collapse… which made us all laugh. Gee look how it’s doing now several months later… the greenback has strengthened significantly against all other prominent currencies.

#78 quitter on 05.21.22 at 6:02 pm

Is that 3 year return to par inflation adjusted? If not
It’s a lot uglier than that!. Also, when it’s often pointed out
that markets go up longer than they go down, its just that they
go down waayy faster than they go up so no wonder it
takes longer to get back to par. Such a carnival ride…
you get off and fall over!…still its almost time for me to beg
to come back to the fold….

#79 Sail Away on 05.21.22 at 6:22 pm

I have to say, Nanaimo in summer is hard to beat. Row to Newcastle Island for a hike with friends, cold swim, smokies on the beach, pull crab traps on return for dinner, now chillin on the deck with a cold one in the shade smelling lilacs and watching sea lions at Jesse Island. Dogs whacked, people whacked, feeling snoozy.

Mountain bike tomorrow? Hike up a mountain? Mow the lawn and fondle the azaleas? All good options.

No idea what my past life self did to deserve such luxury.

#80 Tim on 05.21.22 at 6:23 pm

I don’t think that it’s officially a bear market as the 20% criteria is based on closing prices and not intra day? Also, some of us LOVE market selloffs

#81 Grunt on 05.21.22 at 6:24 pm

Summers is R on next couple of years.

Downtown Toronto unusually busy today for a long weekend. Usually Bloor/Yonge is Mary Celeste. I guess most folks don’t wanna pay gas for a cottage trip.

#82 Ustabe on 05.21.22 at 6:40 pm

Melvin Capital is closing.

I guess Reddit memes can be the real thing and Plotkin goes away a chump, not a champ. He managed to turn 12 billion into not enough to keep his fund operating despite a 2.5 billion bail out at one point. In a year.

On another note, only 3 days of sun and warm temps and the morels have started to pop. We fortunately didn’t have any forest fires nearby so its hunt them down the old fashioned way. Today’s haul was 7 pounds. Had to work for them, for sure. Usually once you find one there are many, but not right now. Lots of walking.

Make thick slices of garlic toast, cover generously with flour dipped and pan fried morels, top with Welsh Rarebit and bake off under the broiler. Plan on making seconds of that.

#83 Penny Henny on 05.21.22 at 6:50 pm

#66 Old Boot on 05.21.22 at 3:47 pm
So many clairvoyants and economystics in the comments, claiming to have confidently predicted the current state of affairs now that much of the turmoil is in the rear view mirror.

Did you sell your casa at peak house?

Did you liquidate your portfolio at peak market?

Did you have cash ready to buy the dip?

/////////////////

Sold casa May 2017, 1 or 2 months past peak (Etobicoke)

Sold all financials Apr 11-12, 2 months past peak. (Prices have dipped 7.5% since)

Currently sitting on 45% cash.

My timing may not be perfect but perfect is the enemy of good.

#84 Retired in Kelowna on 05.21.22 at 6:56 pm

Thank you Ryan. I really enjoy your posts. Very informative.

#85 cuke and tomato picker e on 05.21.22 at 7:06 pm

Number 20 Fruit Vendor GREAT POST KEEP UP THE
GOOD WORK I UNDERSTAND WHAT YOU ARE SAYING.
CASH CASH NO RECEIPT IS YOUR SALVATION.

#86 Quintilian on 05.21.22 at 7:14 pm

#70 Mr Fox on 05.21.22 at 4:10 pm
“Can we however say that the speed by which the Central Banks are tightening their monetary policies is one of the main factors that scares investors?”

In part yes, but remember that when the FED hiked, the market went up approx 1000, and the giddy analysts went on to explain that the FED signaled it was not going to let inflation get out of control.
The consensus was that it was good that the fed hiked because it cleared some ambiguity.

The very next day it flopped approx. 1000.
Just remember that market momentum, is NOT based on General Ledgers, Profit and Loss statements or Balance Sheets.

Again, psychiatry can explain this, but not finance.

#87 willworkforpickles on 05.21.22 at 7:39 pm

DELETED (Abusive)

#88 Nonplused on 05.21.22 at 7:49 pm

It’s nice to blame Putin for everything but fact is all the trends were in place before Russia invaded Ukraine. Some things are perhaps worse because of the sanctions but the inflation and high fuel prices we did to ourselves without any help from Russia. If we don’t stop handing out free money and shutting down the energy sector the inflation and high fuel prices will continue even after Putin brings his troops home.

#89 cuke and tomato picker on 05.21.22 at 8:15 pm

Number 81 yes we live on south Vancouver Island
near Sidney BC love it here. The charmed life.

#90 78 on 05.21.22 at 8:41 pm

#78

Sarcastic troll?

#91 Shirl Clarts on 05.21.22 at 8:49 pm

We are in Bear territory and paying 2.50 a litre for gas while Putin is slaughtering Ukranians even under supoosed heavy sanctions. Tell me what we, the western democracies are doing wrong. Tell us how the Russians are doing. Shouldn’t they be paying a higher price than my family? The families of Ukraine?Honestly.

I am not happy with my investments and I demand Putin pay for his sins. Preferably before I retire.

#92 Alberta Nomad on 05.21.22 at 9:46 pm

This bear market wasn’t really unexpected (at least amongst the financial Twitterati) given how frothy things have been, even without the war. My bigger worry is if China decides to proceed with its invasion of Taiwan this autumn. That will have far larger economic ramifications than the war in Ukraine.

#93 Doug t on 05.21.22 at 9:48 pm

#91 cuke and tomato

Yes yes we know all about your “charmed life” but please for the love of Dog stop telling us fgs gaaah

#94 willworkforpickles on 05.21.22 at 10:08 pm

#89 willworkforpickles – DELETED (Abusive) … So my message was deleted for an abusive response to isleOfVanMan … an incorrect comment about something taken out of context of what i actually said.
If i post the message again leaving out the last line you perceived as abusive will you post it.

Here it is again with the last line removed.
……………………………

#79 isleOfVanMan

“hey willworkforpickles Nobody comes here for advice from you. You were a broken record proclaiming repeatedly at the onset of the Ukraine inavsion how the US dollar was guaranteed to collapse… which made us all laugh. Gee look how it’s doing now several months later… the greenback has strengthened significantly against all other prominent currencies.”
………………………………………………………………………………………………..

You have most definitely got a serious reading comprehension problem if that is what you think i ever conveyed at any time here.
I spoke of the US dollar prior to the Rus/Ukr war that when the Fed gets around to doing QE5 and they will eventually, the US dollar will greatly depreciate.
I said to take advantage of the high price of the dollar to maintain its value considering particular hedges to do so.
After the war began the dollar rose some and got even stronger as the world had no better alternative at the time – and as i said then, that will all change. Change when the Fed is exposed to the herd they have no ability to get inflation under control and have only been bluffing to gullible fools who keep buying their bs.
I said as i said before the war and after it started , the Fed will eventually lose credibility with the herd at the time they are forced to reverse course on this phony attempt of theirs at getting inflation under control. When then heralding in a dollar busting QE5 to support a deflating bubble economy built mostly on debt creation.
What i said was a projection for late this year and early into 2023 … and to start to prepare in maintaining your dollars value before the inevitable dollar crises begins to unfold next year and beyond. Said it before the war started, said it again after it began. Its all going to come to the same conclusion regardless.

#95 Michael in-north-york on 05.21.22 at 10:58 pm

Putin’s aggressive war is a far greater problem than high inflation we experience now, or the economic downturn we might see in the near future.

Every bit of help given to Ukraine by the Western nations is money well spent. Negotiations with Putin will go nowhere, unless his armies suffer a defeat first.

“Arms embargo on both sides” would be a good way to deal with a war between two small countries. The kremlin fascist empire is not a small country and has stated it global ambitions. Kremlin doesn’t get weapons from Canada or other western nations. “Arms embargo” would mean abandoning Ukraine and letting the kremlin empire swallow that country.

If the kremlin fascists win against Ukraine, their ambitions and demands will grow. And then the cost of stopping them will be greater, not to mention the greater risk of direct war between Russia and NATO.

Firm support of Ukraine is our best course of actions from the economic point of view, as well as from the security perspective.

#96 Bankish on 05.21.22 at 11:19 pm

Great post Ryan
All you can do is show people your truth and if they can’t accept it fine. You have tried your best and now it is up to them to pull themselves up by their boot straps and to make something out of their own finances.
It takes time to wrap your head around financials and to take full responsibility for position in life but is worth it in the long run.

#97 Michael in-north-york on 05.21.22 at 11:40 pm

#90 Nonplused on 05.21.22 at 7:49 pm
===

Agreed. We should not oversimplify the situation by pointing to the latest troublemaker and calling him the source of all troubles.

Putin is not the primary cause of our high inflation. Budget deficits year after year are the primary cause.

The Covid emergency, and then Putin’s war contributed to the problem. Without those two events, the inflation spike would happen a few years later, but it would happen anyway.

If we want to return to the 2% per year inflation rate, instead of today’s 6-8% per year, then we need a plan to restore balanced budgets.

#98 Ponzius Pilatus on 05.21.22 at 11:59 pm

#48 Barb
By the way, I paid $2.97 for one medium sized red onion yesterday. I wouldn’t complain if I knew the farmers were getting the bulk of the increase. But farmers never do.
———————-
Well, do you really need red onions?
I just bought a mesh-bag (3pounds) medium yellow Grade A onions for 2.37.
And remember, regular gas is ok in most cars “requiring” premium.

#99 Truth or Consequences on 05.22.22 at 3:10 am

Central banks are not corrupt?

Fully 25% of all money in existence has been produced in the last two years. CBs and specifically the US FED have said they want high inflation which is robbery from the citizenry and they drag their feet to control inflation because they want the 1% to own it all. Money printing for inflation is the biggest scam ever.

Wow. – Garth

#100 Joe Lalonde on 05.22.22 at 6:45 am

Psst…
Don’t look now but…
I heard…
That the Truckers…
Are avoiding pick ups and deliveries.
In California and other areas where they cost of fuel is too expensive as well as new regulations prohibit many delivery vehicles.

But, you didn’t hear it from me.

#101 Wait There on 05.22.22 at 6:59 am

Realistically Russia is gaining the upper hand in this conflict. Dig deep for this.
First this conflict could have been prevented had the west lived up to the promises made in the Minsk accord in 2014.
Second, as long as a reasonable negotiated resolution is prevented the bearishness will get worse.
Third, there is a term “Deal with it” is avoided the damage and hurt to the real people all over the world will continue.
I see it this way. Is Wheat and Energy more important than virtue signalling? Depends on which end of the sh_T sandwich youre in. ( The more bread you have the less Sh_t you will eat.
When Germany PPI reaches this level, you know there will be trouble.
https://www.marketwatch.com/story/german-producer-prices-in-april-posted-highest-increase-on-record-271653032416

#102 Ryan Lewenza on 05.22.22 at 9:20 am

Km “My spouse is stressing as we finally got 60/40 with wealth simple over the oast two years. He keeps looking and I told him not too and just stay the course.”

Happy to hear about the 60/40 but my concern with Wealthsimple is their high long term government bonds position, which will go down more as rates rise. – Ryan L

#103 TurnerNation on 05.22.22 at 9:32 am

Life in Kanada. The world is catching on.
Kanadians like this. And we will have the best climate in the word due to our many Karbon taxes. I cannot wait!
It’s almost like…we are a test zone for this:

https://nypost.com/2022/05/21/how-canada-went-from-liberal-democracy-to-authoritarian-state/
Once a liberal democracy, Canada is now an authoritarian state

Loving our high taxes. Something to read while you wait for your surgeries. (How’s the ‘hospital capacity’ these days?). What’s another billion — with inevitable cost overruns natch.

https://nationalpost.com/news/canada/b-c-to-demolish-racist-museum-and-build-unprecedentedly-expensive-replacement
B.C. to demolish ‘racist’ museum and build unprecedentedly expensive replacement
By agreeing to a starting cost of $789 million, the B.C. government is setting the ball rolling on one of the world’s most expensive museum projects

#104 AK on 05.22.22 at 9:35 am

“First, we’ve had it pretty good over the last three years in the markets and portfolios and nothing goes straight up.”
==============================

Nazdaq 100 has had 13 consecutive positive years. I will be very surprised If we see a 14th. But who knows.

#105 Chris L. on 05.22.22 at 9:54 am

So many clairvoyants and economystics in the comments, claiming to have confidently predicted the current state of affairs now that much of the turmoil is in the rear view mirror.

Did you sell your casa at peak house?

Did you liquidate your portfolio at peak market?

Did you have cash ready to buy the dip?

No?

Thought not.
___________________

Yes. Except I didn’t sell my rental due to having sold off my equities and didn’t want to pay all them taxes in a high tax year, and the rental spins off plenty of passive revenue and when purchased renovated so no capital repairs due.

I also called the market correction for the pandemic, and run-up. Then sold off with inflation, threat of war, and threat of rate increases, as mentioned before.

I currently only hold Canadian oil stock, and then scooped up XEG when it went on sale 2 weeks ago as it’s still soooo cheap. Canadian oils are still massively undervalued. Just wait for China to abondon covid-zero (coming), then they will rev up their economic engine and start sucking up and using all that oil.

Then renewable energy ‘investors’ will switch to oil. Everyday, more investors are moving over to oil all the time forming a strong bottom – as it was only the answer to solve the problem – renewables are just about to officially turn over and die. You can still grab cheap enough BTE (the company is buying up 10% of it’s own shares this year – that’s how cheap it is). I currently own 53,500 shares…so that’s been good. I also own CPG, TVE, CVE, XEG (for good measure) and VUN (lots of oil in there).

You don’t need to know everything, but if you know something well, you can do exceedingly great.

After the run up – target BTE $10…I’ll sell all that too. Still holding 2x RE, but what can you do, that stuff isn’t liquid, but spins off enough rent to live off. World isn’t perfect…mostly it’s due to tax implications. Otherwise, I was going to sell. I have emails to my realtor for evidence if you don’t believe me.

#106 willworkforpickles on 05.22.22 at 10:10 am

#79 isleOfVanMan

“made us all laugh. Gee look how it’s doing now several months later…”
…………………………………………………………………………………………………….

The wars not even 3 months old for one…you can laugh all you like , my projections for the dollar that i made for late this year and into 2023 and beyond haven’t happened yet. Nor did i say they would.
I’m still batting a thousand on all future projections I’ve made here as they come to pass one by one at any rate.
We’ll all see in time who gets the last laugh when the value of the US dollar as i projected future tense starts to unravel.
And as i said before and after the war started where you failed to understand , prudence reins in preserving the high value of the dollar (via hedging) while it remains high before not too distant future Fed moves begin to shred it.

#107 KNOW IT ALL on 05.22.22 at 10:10 am

HAPPY LONG WEEKEND EVERYONE!!!

#108 Dharma Bum on 05.22.22 at 10:15 am

Just hanging around down in Delray Beach, FL.

Oblivious to the markets – housing, stock, or otherwise.

Florida Man syndrome.

Ontario is experiencing a hurricane. Florida is calm.

Irony.

https://www.youtube.com/watch?v=TqSoNyZlg2E

#109 Gravy Train on 05.22.22 at 10:32 am

#104 Wait There on 05.22.22 at 6:59 am
[…] [Are] wheat and energy more important than virtue signalling?[…]

Tell me more about this virtue-signaling you speak of. Is this what devils and demons in hell says to angels in heaven? When did virtue become bad and vice and viciousness become good? (I didn’t get the memo.)

#110 Flop… on 05.22.22 at 10:42 am

“Where do we go” asks Rhino.

Where do we go now, was a line made famous in the 1987 Guns N Roses hit Sweet Child O’ Mine.

Apparently they didn’t know how they wanted to finish the song and ask themselves “Where do we go, where do we go now?”

This is where things get juicy.

Not many people know that Sweet Child O’ Mine is a rip-off.

I guess you’ll want evidence after such a strong accusation?

There are not many things in this world that can’t be explained by a bit of Oz Rock.

In 1981, 6 years before Guns N’ Roses supposedly penned their biggest hit an Australian band named Australian Crawl wrote a song called ‘Unpublished Critics’

Like a lot of Australian bands at that time, they tried to get into the American market, after establishing themselves back home, but ultimately failed.

I don’t think they ever sued for plagiarism, so anyone on here looking for a quick buck is welcome to join to class action lawsuit, I am about to launch, partly for causing childhood trauma.

I’m ready to proceed, but will have to ask my Washed Up Lawyer “Where do we go now?”…

M47BC

https://www.youtube.com/watch?v=YA2P-0D2yds

#111 IHCTD9 on 05.22.22 at 11:01 am

#84 Ustabe on 05.21.22 at 6:40 pm

Today’s haul was 7 pounds
———-

What do you do to preserve that many mushrooms? Can you freeze them?

#112 crowdedelevatorfartz on 05.22.22 at 11:12 am

@#101 Ponzie’s Petroleum Paradigm
“And remember, regular gas is ok in most cars “requiring” premium.”

+++
You should stick to yellow onions.
They give you even more valuable “gas”.

#113 IHCTD9 on 05.22.22 at 11:19 am

#101 Ponzius Pilatus on 05.21.22 at 11:59 pm
#48 Barb
By the way, I paid $2.97 for one medium sized red onion yesterday. I wouldn’t complain if I knew the farmers were getting the bulk of the increase. But farmers never do.
———————-

Well, do you really need red onions?
I just bought a mesh-bag (3pounds) medium yellow Grade A onions for 2.37.
—————

A bag of cooking onions might go for that, but sweet Onions are closer to 6 bucks. Red Onions have always been even more expensive than the sweet onions. Right now, I’m buying the cooking Onions because I’m sautéing them 99% of the time.

Much more pressing is the price of bacon right now : (

#114 Down Friends on 05.22.22 at 11:39 am

So tell me, why should stock markets reverse and start going up again like they have been the last decade?

What forces will push them up?

If you say the fed, then you just admitted the fed can manipulate markets – think about that…

If not the fed, then what big natural force of sound wholesome goodness with no baggage will provide the lift?

Anyone?

Wait for it, in the current economic, financial and monetary madness we live in someone will say everything is just fine…

#115 I don't know on 05.22.22 at 12:07 pm

#104 Wait There on 05.22.22 at 6:59 am

Russia is getting the upper hand here?

Militarily: they have lost thousands of soldiers and their capability is weakened, their deterrence has been reduced, all military objectives have been missed in Ukraine, NATO is reinvigorted, Finland and Sweden are game changers geopolitically, and the US and allies are stronger and more unified than ever.

Domestically: they are drifting further into dictatorship, their domestic economy is taking a hit, and it will only get worse. This fallacy floating around about the Ruble’s relative strength being an indicator of some weird victory is amateur at best, and delusional at worst.

Their closest ally and friends are all too happy to watch them bleed (for their own benefit of course).

Russia’s key to prosperity has always been and always will be cooperation with Europe. Right now, they are as far from cooperation with Europe as they have been since 1989, when the failed Soviet Union couldn’t figure this out either and collapsed.

Inflation will moderate once supply chains are corrected, rates rise, and demand is diminished. And, of course, once Russia realizes the Ukraine war is a quagmire with no benefit that cannot be maintained at this rate of attrition.

RE: 2014 everyone now realizes the passive attitude taken thus far has been a mistake. Hindsight is 2020.

In no way at all is “Russia getting the upper hand”.

It’s amazing how our host is able to stand the cesspool of misinformation that is social media. I shutter to think of what does not get published.

IDK

#116 Philco on 05.22.22 at 2:10 pm

DELETED (Libel)

#117 Tony on 05.22.22 at 4:16 pm

Re: #10 Chris L. on 05.21.22 at 11:23 am

What if rates never normalize? With the spread between the Fed funds rate, the Bank of Canada rate and the inflation rate being the widest in history I see a recession as being impossible due to forward demand for everything to try to beat higher future inflation. I know rates will never normalize without a recession or a depression.

#118 stealth on 05.22.22 at 4:45 pm

Thank you Ryan,

When it comes to Bonds (except floating rate kind), all things being equal are they expected to stay roughly correlated with equities due to interest rate increases?

I suppose the real question is role of government and corp bonds (not floating rate and not preferred shares) while interest rate increases occur and if recession materializes. (unless interest rate increases are stopped due to recession)

In any case, even a sentence from you on this topic would be much appreciated.

#119 Tony on 05.22.22 at 7:00 pm

Re: #62 Shawn on 05.21.22 at 3:25 pm

If you go back into the history of their earnings. I just remember everything like remembering chess board moves you’ll find virtually every year they lost money on everything but their credit card division.

#120 Westcdn on 05.23.22 at 11:38 am

My fearless projections for the next 12 months:

The inflation rate will fall but not less the BoC interest rate (4.5%). The velocity of money is a threat but reducing surplus money supply should help. The chickens of cheap debt will come home to roost to the angst of business and peoplekind – slower GNP ahead.

Neither the American or Cdn Federal Governments will raise income taxes. It would take a master politician to get elected if you announced that intention. They will tinker with the symptoms of inflation but not the cause of the issue (excess debt). Rising interest rates will help but I believe small income tax increases are the better answer. It would better suited to protect the have nots and a bit more from the haves. This would be a tough trick but it would make Tiffer’s job easier.

Equity markets will fall another 10 – 15%. The decrease will be tested by traders and buy the dip crowd. No “V” recovery will happen if bottom is found.

Energy looks to be the best bet to buy although Russian export crude supplies are still there – natural gas not so much. My preferreds and Reits have held in well so far. I will continue to place priority on buying down my line of credit (helco) as the money is still there if opportunity presents itself.

I read a new ETF based on what US politicians buy is out there. I forget the symbol. I think it will do okay to well. Follow the money speaking of which bonds are doing better than I expected. I am assuming capital is flowing from equities (risk) to bonds (safe). I assume speculation largely explains how Cryptos and gold get their value as well as many other assets – promoter’s delight.

Back in the day, we had a saying – “even a broken clock is right twice a day”. I see the American markets are off to a good start, bodes well for Canadians come Tuesday. If I put my money where my mouth is, I could buy Options come Thursday but that game looks rigged against me at this time.

Comments from an attempting steerage section escapee.