Richard Bernstein: Investors’ Concerns throughout the Bull Market
Richard Bernstein’s CNBC interview
In a July 25, 2017, interview with CNBC, Richard Bernstein, the CEO of Richard Bernstein Advisors, shared his views on the bull market, risks to the bull market, and how the 2016 presidential election drove the market rally.
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Bernstein on the market rally
Bernstein noted, “I think, why have people stayed so conservative, is really the hangover from 2008.” Investors remained concerned throughout the bull market (QQQ) (IWM), as they expected that a situation like the 2008 crisis might repeat. However, despite the fact that the fundamentals would not be very different from the 2008 situation, individual investors, pension funds, institutional investors, and hedge funds could remain invested in the market.
During the 2008 global financial crisis, the S&P 500 Index (SPY) fell nearly 52% from the high of 1,549 in October 2007 to its low of 735 in February 2009. However, the index started to recover after that. During the 2011 European debt crisis, the S&P 500 Index fell nearly 17% from its high of 1,364 in April 2011 to a low of 1,131 in September 2011.
During early 2016, when the concerns regarding global growth (ACWI) rose and the slowdown in emerging economies (EEM) increased, the S&P 500 Index fell nearly 12% from the high of 2,080 in December 2015 to a low of 1,830 in February 2016. Every event affected the performance of the S&P 500 Index.
Despite many crises, markets eventually recovered its losses in the long term. The bull market has continued in the last seven years and has returned nearly 128% in the last seven years. Despite the concern and conservative approach, investors stay invested in the market.
In the next part of this series, we’ll analyze Bernstein’s view on why the presidential election mattered to the bull market.