..Shanghai Composite Index is still -43% below its 2007 all time high 17+ years later.
..those speculators who speculated riding the market which rose 5.5x over a short 2+ years and who Buy and Hold never recovered their money back
All time view 000001 Index Charts and Quotes — TradingView
..Nikkei 225 peaked in Dec 1989 at 38,916 which crashed -80% in a train wreck that only saw it bottomed almost 20 years later at 7568 on Feb 2009 and it was only in July 2024 that the Dec 1989 peak was finally revisited, almost 35 years later!
All time view Japan 225 Chart – NI225 Quote — TradingView
..from Mar 2020 Covid lows, Nifty50 (India index) has risen 3x fold to its peak in Sept 2024 and since then has corrected -10%
but looks like its 300% bull rally is experiencing exhaustion and likely to be susceptible to falling victim to Trump's tariff war.
All time view Nifty 50 Index Today — Chart and News — TradingView — India
..now looking at Nasdaq, it has risen 206.82% from its Oct 2022 lows and only now that we are seeing a real threat to its upward trajectory after a -10% correction. But its rise from Mar 2020 Covid lows to its recent peak has been even larger at 283%....it would take a drop of Nasdaq to about 13,000 to touch the uptrend line from 2016 base, and this is some -36% lower from where it is now at 20,287.
...from its dot.com peak in March 2000 of 4397, it crashed to bottom in 2002, but it took until Feb 2015, a good 15 years before that 4397 was surpassed again. Nasdaq 100 Index Chart — NDX Quote — TradingView
What I'm showing you here is that the US market could well poised to emulate the Shanghai and Nikkei experience after the forthcoming crash in which it goes nowhere for more than a decade!
This extended sideways move can be extremely cruel to a large equity portfolio that suffers the full brunt of the crash that wipes out 30-40% of value and which may never recover for an extended period of time.
We can't time the market in that we do not know when the crash will arrive, and there can be a number of mini corrections and crashes before rising again, to give an impression or to lend confidence of a rapid recovery.
So with the likelihood of a systemic event that delivers a GFC 2.0 type recession that cannot be discounted, I'd argue that patience to stay on the sidelines in cash and wait for the aftermath of the crash/recession before getting involved in equities would be more sensible. More so given Trump's propensity to risk a larger recession and systemic event to address US long term economic issues.
