As we approach the end of 2020, let's take note of a few market cycles. In our humble opinion, one of the most recognizable and powerful cycles is the 20-year cycle. As we look at the data, the first year of a decade on a 20-year cycle basis is not a bullish year over the last 100 years. 20 years back in the year of January 2001 – January 2002 (using the S&P 500 index) the market declined -14.63%. 40 years back in the year of January 1981 – January 1982 the market declined by -11.80%. 60 years back the cycle was kinder to investors as it was an up year from January 1961 – January 1962 a gain of +15.66%. 80 years back January 1941 – January 1942 the market lost -15.6%. In January 1921 – January 1922 the market gained just +2.67%. So, going back over the last 100 years every 20 years we have 3 significant down years, only one clear up year, and one flat. Another cycle we consider to be significant is the 90-year cycle. As one may recall from history books, the early 1930s were the start of the Great Depression and the lost decade. From January 1931- January 1932, the market declined by close to -48%. Another 90 years back was the 1840s, also a period of economic depression in The United States. Given our previous blog post (Thursday, December 24) which outlined the current market valuations. One would be wise to be cautious this coming year, as it may be harder for traders and investors in 2021 than in 2020 based on the foregoing.

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