About Financial Market

Focus on facts about Financial Market, rather than opinions, rumours and so on

Only an objective view on the economy and financial market can help you to face a Market volatility and uncertainty. You probably ask “How to get objective view?”. My answer is: Look into numbers, look into past and look into many sources from different authors, finally, always be a searcher!

Odds of gains

No Data Found

Likelihood of gains in The Stock Market

Longer you are on the market, the higher likelihood of profits you have.

Based on the past data, it’s “almost” certain that after 15 years with S&P 500 you will gain some profits.

But you have to be long term investor, not a daily trader.

Beat the Market is a challenge ​
  • Approximately 85% of professional founds is not able to beat the S&P 500
  • It looks similar in reference to individual investors who trying select “the best” stock(s)
  • By following the Market, you return from investments would be lower, but level of risk and potential failure too
  • Investment fees, taxes, and human emotion working against you
  • You can do it with investment services like fool.com only if, they have long-term success history and you will follow their strategy consistent

Founds vs S&P 500

No Data Found

Average Annual Returns, 2011 to 2020

No Data Found

Motley Fool

Cumulative Growth of a $10 000 investment

No Data Found

Top tax rate on capital gains

No Data Found

Taxes can eat your gains

Capital gains tax can eat a good performance of your portfolio. You always have to take into account and calculate an impact of taxes in your country. Especially, when you are a trader.

For example, if you are live in Denmark, then 42% of your profit has to be return to your government, that’s a big factor you have to think about.

Sometime there are additional regulations, taxes or tax credits, which you have to be aware from your local perspective

Different states of Market condition

Correction

A drop of more than 10% but less than 20%

Average Market decline
0 %
Average duration (days)
0
# of occurences
0

Recessions

When economic activity (measured by GDP) declines for two consecutive quarters

Average duration (months)
0
# of occurences
0

Bull Market

Represent a next market high and its prolongation after the market has fallen 20% or more.

 

Average return
0 %
# of occurences
0
Average duration (months)
0
Time in Bull Market
0 %

Bear Market

A bear market represents a 20%+ decline from recent highs and can precede a recession.

Average decline
- 0 %
# of occurences
0
Average duration (months)
0
Time in Bear Market
0 %
Market crash

Next to the Correction and Bear Marker, there is also the definition of Crash, very often used incorrectly as a counterpart of Bear Market, but there is little difference between both:

It’s a decline of 20% or more, what is similar to Bear Market, but Market Crash is quick and brief, while Bear Market is slow and prolonged.

* Numbers about Bull and Bear Markets refers to period from 1942 to 2021.

Average market recovery​

To know the statistics about market recovery is essential during facing of correction or bear market. This knowledge will give you enough confidence and composure to survive dificult times or even earn more in future.

It’s very difficult to anticipate how long correction will take or how deep it will be, when we are in. Nevertheless, based on the past data from US Market, it always result with reversion and upturn. But it’s about whole market and leading indexes, not always for particular stocks.

Black Swans​
  • Sometimes everything works, but one, totally unexpected thing/occurrence can change everything eg pandemic, war, nature catastrophe
  • Portfolio diversification and financial pillow can save you
  • Always be open and ready for strategy adjustment or change
Examples:
"Facts are stubborn things; and whatever may be our wishes, our inclinations, or the dictates of our passion, they cannot alter the state of facts and evidence.”
John Adams