The Reformed Broker writes:
Every bear market has these two things in common:
1. They end
2. Expected returns go up
The first thing is self-explanatory. The second thing should be obvious but from my talks with thousands of investors over the years, I have found that it is most certainly not intuitive to most people.
When I tell you that expected returns are rising as stock prices fall, this is an overly simplistic way of saying that investors only get paid ...