"Bail-out" was the word of the year, according to the compilers of the Merriam-Webster dictionary. It was certainly the word on the minds of investors for most of 2008, raising hopes that were usually quickly dashed.
Back at the start of the year, expectations were high that the bull market would resume promptly. Wall Street was unfazed, says Kopin Tan in Barron's; a poll of 12 US strategists revealed a consensus forecast of a 10% rise in the S&P 500 over the year. In Britain, Investment Week's poll of fund managers' year-end targets for the FTSE 100 ranged from 6,400 to a strikingly specific 7,386. But there was already "concrete evidence that the effects of the credit crunch were spreading to the wider economy", as Alan Clarke of BNP Paribas put it. As the fundamentals deteriorated, earnings began to fall and the frozen credit markets showed no signs of thawing, stocks continued to tick down.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
-
Will “Liberation Day” strike again?Donald Trump’s 90-day tariff pause comes to an end on 9 July. Can we expect further market turmoil?
-
Israel claims victory in the '12-day war' with IranDonald Trump may have announced a ceasefire in the 12-day war between Israel and Iran, but what comes next depends on what happens internally in Iran
