What Shape Will the Recovery Take? - Adviser Investments

What Shape Will the Recovery Take?

V-shaped? U-shaped? W-shaped? You’ll hear a lot of letters from pundits predicting what the market recovery will ultimately look like. Vice President Charlie Toole discussed his measured stance on market prognostication in our recent quarterly webinar*: Separating Pandemic Noise From Investment Signals.

Please enjoy the excerpt below and click here for the full webinar replay to hear more.

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Charlie Toole: All bear markets come to an end. But predicting when we recover and what that recovery will look like is a fool’s errand. Like you, I’ve seen a lot of predictions on the type of recovery that we’ll have. Is it going to be a U-shape, a W-shape, a V-shape? It’s an alphabet soup of letters. I’ve even seen a prediction for an L-shaped recovery, which is really no recovery at all.

But I expect this recovery will be like other recoveries that we’ve had in the past. A version of two steps forward, one step back. Many think that we had a V-shaped recovery after the Great Recession in 2008–2009, but it wasn’t. Yes, we had a quick rise from the bottom in March of 2009 but we didn’t fully recover until early 2013 and there were many drops in the stock market along the way. Many forget that we had greater-than-10% drops in 2010 and 2011, and that made the recovery a bumpy one. Like all recoveries, this one will be uneven.

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Click here for a replay of Separating Pandemic Noise From Investment Signals. Please contact us at (800) 492-6868 to learn more about our comprehensive wealth management solutions.

*Webinar recorded after the market closed on Wednesday, April 22, 2020.

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