In the US, stocks have shown a strong trend for more than a century, growing by 6.75 per cent per year after inflation, with income reinvested. London's Lombard Street Research points out there have been only 26 months in the past 140 years when the S&P 500 was further below this trend than it is now. All bar six, three each in 1932 and 1982, were caused by world wars.
Those two years marked the lows of the worst bear markets of the last century. So stocks look likely to stop getting cheaper quite soon.
But they could fall further before hitting bottom. In 1932, stocks fell 25 per cent more after becoming this cheap compared with trend – but then doubled in a matter of weeks.
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