How long is the wait after a market falls?

The cards, in order

1. US: stocks cost 40.7 times average annual earnings; at the 1999 peak, 44.2

   What came after the 1999 peak?

2. United States: the stock index fell 40.1%

   Is that the worst case?

3. Japan: the stock index fell 73.2%

   And housing in Japan?

4. Japan: real house prices fell 48.9%

   And US housing?

5. United States: real house prices fell 38.9%

Getting back to the peak takes years to decades

The US stock index fell 40.1% from its 1999 peak and regained it in 2013. Japan’s fell 73.2% and regained its 1989 peak only in 2017, while Japanese house prices fell 48.9% after inflation and have not regained the old peak. A high valuation does not tell when a fall will come, or whether it will; these cards only show how long past ones lasted.

Sources

• Robert Shiller: stock market data
• World Bank: stock price index change
• BIS: real residential property prices

All findings →