Yahoo Finance: "Bear markets 'always' bring down inflation: DataTrek"

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Yahoo Finance: "Bear markets 'always' bring down inflation: DataTrek"

Excerpt from Yahoo Finance quoting DataTrek co-founder Nick Colas:

…. “The S&P 500 is officially in a bear market.

For anyone watching their portfolios — or near retirement — this is stressful.

But there’s a bright side, of sorts: bear markets tend to scare away the inflation crushing investors today.

“Equity bear markets have one hidden positive: they always bring lower US inflation,” DataTrek’s Nicholas Colas wrote on Tuesday.

Though this might be cold comfort to an investor that bought stocks when the S&P 500 was 4,766 at the end of 2021, it’s a potential light at the end of the tunnel for those less exposed to markets but very exposed to the rising costs of living.

Looking at historical precedent, Colas pointed to 1973 to 1974, 2000 to 2002, and 2008 markets, noting that in the first and last instances, “PCE inflation fell by 6% during/right after a +35% decline for the S&P 500″….

Full article here on Yahoo Finance.