As stocks fall into the abyss we thought some perspective was required as the correction has now reached 24%, the median recession-led correction:
- The average recession-inspired correction since World War 2 is 30% although on 3 occasions the fall has punched out closer to 50%.
- Bear markets usually experience plenty of sharp countertrend bounces but backing stocks to reach an ultimate low in the short-term is optimistic in our opinion.
The key takeout however is that stocks bounce strongly following recession-led declines.
