It's Not 1979

December 19, 2022

Enjoy this week's "Investor Insights," a weekly newsletter that highlights the financial news you need to know and provides tips and tricks to help you make better investment decisions.

The high inflation environment we see today is different from the one we saw in 1979. Back then inflation had already been high for 15 years (vs. less than one year today) and the unemployment rate was 6% (vs. 3.6% today). ₁

The average bear market lasts about 15 months with a loss of between 25% to 35%. Yet, every bear market has been followed by a bull market which historically lasts an average of 3.8 years and sees the market rise 167%. ₂

For the first time in years, income-oriented investors have options beyond stocks. As of this December, only 13% of S&P 500 companies have higher income yields than 10-year Treasuries. ₃

Interest rate hikes aimed at taming inflation seem to have also discouraged private companies from going public. Just $207 billion has been raised this year from IPOs — down 68% since last year. ₄

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MarketWatch - "Opinion: History Shows Powell Won't Have to Hammer the Economy the Way Volcker Did"
Bloomberg - "Stock Swings Will Last Into 2023, Edward Jones' Mahajan Says"
Barron's - "Stocks Could Return About 10% in 2023 - But First, They're Going to Fall"
Bloomberg - "After This Year's IPO Slump, Bankers are Wary of 2023 Relief"

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Disclosure: This information is furnished for the use of Glen Eagle Advisors, LLC, Glen Eagle Wealth, LLC, and their clients and/or contacts. It does not constitute the provision of investment advice to any person. It is not prepared with respect to the specific objectives, financial situation, or particular needs of any specific person. Investors reading this commentary should consult with their Glen Eagle representative/financial advisor regarding the appropriateness of investing in any securities or adapting any investment strategies discussed or recommended in this newsletter.

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