7 Facts That Will Free You From a Fear of Stock Market Crashes
The current bull market in stocks is closing in on an astounding 10 years in length, making it the longest bull market run in all of modern history.
Largest Bull Markets
|#1||09’-18’ (Current)||115 months*|
*As of September 2018
Understandably, this makes many people very nervous.
Everyone remembers the mayhem of 2008 – and with stock prices at all-time highs, the fear of a market meltdown is a valid concern for many investors.
How to Become Unshakeable
Today’s infographic is from Tony Robbins, leveraging data and talking points from his #1 Best Selling book Unshakeable: Your Financial Freedom Playbook, which is now available on paperback.
It leans on insights from the world’s top investors – like Ray Dalio and John Bogle – to present seven indisputable facts about market crashes, using clear patterns established over decades of data.
By understanding these seven facts, you’ll be able to prepare for the recurring seasons of the financial market, including winter, and it will help give you an enormous edge over even many sophisticated and experienced investors.
Seven Indisputable Facts
Here are the seven facts that will free you from a fear of stock market crashes:
Fact #1: On average, corrections happen once per year
For more than a century, the market has seen close to one correction (a decline of 10% or more) per year. In other words, corrections are a regular part of financial seasons – and you can expect to see as many corrections as birthdays throughout your life.
The average correction looks something like this:
- 54 days long
- 13.5% market decline
- Occurs once per year
The uncertainty of a correction can prompt people to make big mistakes – but in reality, most corrections are over before you know it. If you hold on tight, it’s likely the storm will pass.
Fact #2: Fewer than 20% of all corrections turn into a bear market
When the stock market starts tumbling, it can be tempting to abandon ship by selling assets and moving into cash. However, doing so could be a big mistake.
You would likely be selling all of your assets at a low, right before the market rebounds!
Why? Fewer than 20% of corrections turn into bear markets. Put another way, 80% of corrections are just short breaks in otherwise intact bull markets – meaning that selling early would make you miss the rest of the upward trend.
Fact #3: Nobody can predict consistently whether the market will rise or fall
The media perpetuates a myth that, if you’re smart enough, you can predict the market’s moves and avoid its downdrafts.
But the reality is: no one can time the market.
During the current nine year bull market, there have been dozens of calls for stock market crashes from even very seasoned investors. None of these calls have come true, and if you’d have listened to these experts, you would have missed the upside.
The only value of stock forecasters is to make fortune-tellers look good.
– Warren Buffett
Fact #4: The market has always risen, despite short-term setbacks
Market drops are a very regular occurrence. For example, the S&P 500 – the main index that tracks the U.S. stock market – has fallen on average 14.2% at least one point each year between 1980-2015.
Like winter, these drops are a part of the market’s seasons. Over this same period of time, despite these temporary drops, the market ended up achieving a positive return 27 of 36 years. That’s 75% of the time!
Fact #5: Historically, bear markets have happened every three to five years
In the 115 year span between 1900-2015, there have been 34 bear markets.
But bear markets don’t last. Over that timeframe, they’ve varied in length from 45 days to 694 days, but on average they lasted about a year.
Fact #6: Bear markets become bull markets
Do you remember how fragile the world seemed in 2008 when banks were collapsing and the stock market was in free fall?
When you pictured the future, did it seem dark and dangerous? Or did it seem like the good times were just around the corner and the party was about to begin?
The fact is, once a bear market ends, the following 12 months can see crucial market gains.
The best opportunities come in times of maximum pessimism.
– John Templeton
Fact #7: The greatest danger is being out of the market
From 1996 through 2015, the S&P 500 returned an average of 8.2% a year.
But if you missed out on the top 10 trading days during that period, your returns dwindled to just 4.5% a year.
It gets worse! If you missed out on the top 20 trading days, your returns were just 2.1%.
And if you missed out on the top 30 trading days? Your returns vanished into thin air, falling all the way to zero!
You can’t win by sitting on the bench. You have to be in the game. To put it another way, fear isn’t rewarded. Courage is.
– Tony Robbins
The World’s 100 Most Valuable Brands in 2019
Technology brands account for 20 of the world’s 100 most valuable brands in 2019, combining for a whopping 43% of total brand value.
The World’s 100 Most Valuable Brands in 2019
Brand equity can be a challenging thing to build.
Even with access to deep pockets and an innovative product, it can take decades of grit to scrape your way into the mainstream consciousness of consumers.
On the path to becoming established as a globally significant brand, companies must fight through fierce competition, publicity scandals, changing regulations, and rapidly-evolving consumer tastes – all to take a bite from the same piece of pie.
Cream of the Crop
Today’s visualization comes to us from HowMuch.net, and it showcases the 100 most valuable brands in the world, according to Forbes.
Here are the powerful brands that sit at the very top of the list:
|Rank||Brand||Brand Value ($B)||1-Yr Value Change||Industry|
It should be noted that the list is ordered by brand value, a measure that tries to calculate each brand’s ultimate contribution in financial terms to the parent company. You can see that full methodology here.
Finally, it’s also worth mentioning that brands with only a token representation in the United States have been excluded from the rankings. This means companies like Alibaba or Vodafone are not represented in this particular visualization.
Tech Rules Again in 2019
For another straight year, technology dominates the list of the 100 most valuable brands in 2019 – this time, with six of the top seven entries.
Most of these brands saw double-digit growth in value from the previous year, including Apple (12%), Google (27%), Amazon (37%), Microsoft (20%), and Samsung (11%). The one notable exception here is Facebook, which experienced a 6% drop in value attributed to various struggles around the company’s reputation.
Here’s a look at how industries break down more generally on the list:
|Industry||# of Brands||Brand Value ($B)|
As you can see, technology brands make up 20% of the list in terms of the number of entries – and a whopping 43% of the list’s cumulative valuation.
In total, technologies brands combined for $957.6 billion in value. Even when including Facebook’s recent drop, this is an impressive 9.7% increase on last year’s numbers.
Will the double-digit increases for the world’s largest tech giants continue into 2020, or are brands such as Amazon and Google going to start seeing the same type of pushback that Facebook has grappled with among consumers and regulators?
The Allure of Craft Cannabis to Investors
Craft products are taking the retail world by storm. Find out why investors should be paying close attention to craft cannabis and its potential impact.
The Investor Appeal in Craft Cannabis
They say if you do what you love, then the money will follow. In the multi-billion dollar cannabis business, that has certainly proved true for those who have been passionate about the plant for decades — otherwise known as craft growers.
Today’s infographic from Pasha Brands dives into the huge consumer demand for craft products, and why investors should pay attention to this trend as it extends into cannabis.
The Perfect Craft Product
Chances are, you may have encountered any of the following at least once: microbrewed beer, specialty coffee, premium wine, or organic food. They’ve become so popular, that craft versions of all these are steadily carving a valuable niche in their original markets.
|U.S. Market Size, 2017||Craft Market Size, 2017||Share of total|
|Beer vs Microbrew Beer||$111B||$26B||23%|
|Coffee vs Specialty Coffee||$32B||$10B||31%|
|Wine vs Premium Wine||$80B||$44.8B||56%|
|Food vs Organic Food||$898B||$49.4B||5.5%|
Whether it’s introducing flavors into brews, slow-roasting beans, producing wine in small lots, or using a conscious “farm to table” label — what they have in common is the careful attention that’s paid to the process from start to end.
Craft cannabis bears a strong resemblance to all of these in that way, as growing it involves extra care, compared to large-scale producers. For example, hand-trimming is more labor intensive than using machines, but results in products with superior quality.
What are some other characteristics of craft cannabis?
- Attention to detail
A hands-on approach allows growers to personally ensure each cannabis plant is healthy.
- Sustainable practices
The use of organic farming to save energy, creating a smaller environmental footprint.
- Social responsibility
Smaller growers typically leverage local connections, creating employment opportunities.
- Artisanal branding
Sophisticated and modern packaging helps appeal to different types of craft cannabis consumers.
It’s clear why consumers care about craft cannabis. But what does it offer investors?
Making the Case for Craft
Investors should be paying close attention to craft cannabis for three key reasons: a higher price point, a focus on quality, and access to the retail market.
Upscale Price Tag
On average, organic cannabis has a higher price point attached to it, compared to regular grade cannabis.
- Industry average: $9.02/ gram
- Organic average: $11.40/ gram
Using organic methods to grow cannabis means that the final product on shelves boast an enhanced potency and effect. Since craft cannabis is also grown organically, it’s clear that consumers are willing to spend more to secure a premium product.
Promise of Quality
It might not come as a surprise that the most famous craft cannabis regions are also where the biggest volume of legal cannabis sales come from. California and Canada accounted for nearly 38% in global market share in 2017:
- Worldwide sales: $9.5 billion
- California sales: $3 billion
- Rest of U.S. sales: $5.5 billion
- Canada sales: $0.6 billion
- Rest of world: $0.4 billion
These two areas have a foothold in cannabis sales, and with recreational legalization unfolding in both – and 75 million people living between the two jurisdictions – it will only continue to grow.
Opening the Doors
Following nation-wide legalization in Canada and an increasing number of states in the U.S., the continent is facing a cannabis shortage. Why? As it turns out, while craft growers are abundant, they still face regulatory hurdles in order to move from the “gray” underground market into launching legal operations.
Craft cannabis could be a cornerstone for industry growth, but its growers have been in the shadows for a long time. As cannabis gains momentum, tapping into the huge network of craft growers will be key for success.
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