Economic and Stock Market Recovery
About This Episode
With public policy and multiple forced lockdowns in 2020, we knew we’d see a major impact on the economy unlike the recessions and bad economic periods we’ve seen in the past. Today, we’re focusing on recovery.
Recovery has two main parts, economic and the stock market. Where the economic recovery reflects what’s happening on Main Street, the stock market recovery looks to the future. For this episode, we’ve broken down this stock market recovery into three main phases and we’re taking a deeper look at valuations and expected returns for specific types of stocks.
Marcelo and I talk about the stock market and economic performance during 2020, how the 2020 economic contraction compares to historical recessions, economic expectations for the coming years, which investment styles perform best in recession and recovery phases, and so much more!
Thank you for listening!
- The economic impact of lockdowns in Canada and the US (1:45)
- Overall economic performance for 2020 (3:06)
- How does the 2020 recession compare to the Great Financial Crisis? (4:00)
- Projected economic growth for 2021 (5:14)
- Analyzing S&P 500 performance over the course of 2020 (6:27)
- Putting the 2020 economic contraction into a historical context (8:13)
- Why the dot-com crisis was the most painful recession I’ve lived through (9:33)
- 2020’s V-shaped market recovery pattern (11:33)
- The three phases of stock market recovery (12:40)
- Stock market performance during the lockdowns of phase one (13:40)
- How vaccine announcements affected the stock market (14:45)
- 2020 year-end valuations relative to 20-year valuations (15:53)
- Economic expectations for the next two years (17:36)
- Why economic predictions are unreliable (19:18)
- The potential impact of an extended period of high unemployment and inflation (21:09)
- The performance of value stocks in recessions and recoveries (22:39)
- Distinguishing between a bubble and a shock (23:07)
- How different investment styles perform in a recovery phase (24:16)
- Why a sound investment philosophy is critical (26:00)
- And much more!
Mentioned in this Episode:
Thanks for Listening!
Chasing performance is what happens when you see a stock or sector performing well or other investors reaping big rewards so you decide to buy in at the high levels. It’s not at all a new phenomenon as there are always stocks with new and exciting stories inducing the fear of missing out.
In this episode, Marcelo and Keith talk about geopolitical risk/shock in investing. When we’re facing major geopolitical events, war, health crises, or a recession, many investors’ immediate reaction is that we’ve never seen something like this before. We hear – this time is different. Unfortunately, that often leads investors to make short-term, reactive decisions that ultimately harm their long-term investment plan.
In this episode, Keith, Marcelo, and Andrew talk about why we invest, what success looks like, the four quadrants of success, the importance of connection and relationships, the power of gratitude, saving for experiences, and so much more!