The Markets Could Be Stormy This Summer — But Not A Washout

It's nearly as difficult to make the case for a crash as it is to make one for a large move to the upside. And the 40-year bull market still has life.

markets, bull market, bear market, equities, risk, margins, financial assets

This article originally appeared in Barron's on April 30, 2023.

This year, the old saw is coming true: Investors would be well-served by selling in May and going away on a nice vacation.

But they should make sure to buy a return ticket. While there’s likely to be unsettled weather this summer, it’s unlikely to be a hurricane, much less the beginning of a new secular bear market. The 40-year bull still has life.

The Oliver Wyman Forum is finishing up a massive research project on the U.S. equity market’s performance since 1871, bringing together economics, history, sociology and finance to explain the market’s ups and downs over the past century and a half. Investors can use those insights to think about the future, both short- and long-term.

The work shows that equity prices are driven by the subtle and ever-changing interaction between corporate profit margins, risk aversion, real risk-free interest rates, and society’s propensity to own financial assets.

Read the full article in Barron's.