Pound-cost averaging and cyclical shares

There are reasons other than Coppock for supposing that the bear market that began in 2007 may have ended. One is the idea of a climactic sell-off.

These often signal the end of a bear phase and I think we have had one. Investors may not have spotted it because it happened over months rather than days.

The traditional idea of a climactic sell-off is a high-volume selling storm in stock markets often associated with a major bankruptcy.

I think we have had such a sell-off but it happened over two months, from late September to late November and was triggered by the collapse of Lehman Brothers.

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Autumn's massive crash
In retrospect, we can see that the autumn of 2008 saw one of the greatest ever crashes in equity prices.

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