Economies gain strength from periods of weakness, as do stock markets. It’s basic stuff that’s lost on American policy types who to this day imagine that the Federal Reserve can create bullish conditions out of otherwise bearish ones.
With country economies, it’s during periods of economic weakness that businesses and individuals are forced to come to terms with what they’re doing wrong, only to fix the mistakes. That’s why periods of sluggish to no growth signal recovery: the errors that caused the sluggishness are being taken care of. Which is why governmental attempts to “fight” recessions only succeed insofar as they elongate them while laying a wet blanket on the recovery. Hopefully it’s obvious that the sooner errors are realized, the better.
Stock markets are no different.
Read the rest of the article at Forbes.