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Chart of the Week
Retracing Our Steps
EQUITIES
US equity returns historically have been asymmetric following a 50% recovery in bear markets, a threshold which was crossed earlier this month. In the 12 months following such retracements, the S&P 500 experienced significantly larger gains than losses, with downside periods averaging a modest -5% loss. While every bear market is different, the momentum of previous rebounds and a favorably skewed return profile suggest equities may sustain their rally.
Source: GS Investment Strategy Group, Bloomberg, and GS Asset Management.