What we can learn from market history and the worldwide bull market. That and more on this Saturday personal finance edition of Motley Fool Money. I'm Robert Brokamp and this week I speak with Ryan Dietrich, the Chief Market Strategist at Carson Group and a consistent source of data about the market's past and what it could say about the future. But first, some news from this week. According to Callum Thomas of Top Down Charts, 80% of the 70 companies he tracks have stock markets that are up at least 20% off their 52-week lows. He writes that this indicator has rarely been above 50% over the past couple of decades, and a surge like this is usually a good sign. Previous spikes have happened in 2003, 2009, and 2020, which were all good times to be an investor. Looking more locally, a recent graphic from Bloomberg illustrates that the year-to-date rally in U.S. stocks is the broadest ever, as there's a record number of individual stocks in the S&P 500 that are outperforming the index. That said, not every stock is doing well, including some of the biggest tech-oriented names, which has resulted in lower valuations for those stocks. In fact, according to Matt Cermonaro of Ritholtz Wealth Management, the forward P.E. of the MAG7 minus Tesla is now below the forward P.E. of the consumer staples sector, which has returned almost 15% so far this year. Next up, mortgage rates are dropping. The current 30-year fixed rate is 6%, down around 80 basis points from a year ago and the lowest level since 2022. Lower rates might make homeownership more affordable for some buyers, especially as price growth is slowing. This past week, Standard Poor's announced that the Case-Shiller National Home Price Index rose an annualized 1.3% in December, down from 1.4% in November. Another home loan news, a report from the Federal Reserve Bank of New York published on Tuesday, says that the total amount in home equity lines of credit, otherwise known as HELOCs, rose in the fourth quarter of 2025, which was the 15th consecutive quarterly increase. The total amount in HELOCs is now $434 billion, up 36% over the past four years. According to Bankrate, the current average interest rate on a HELOC is 7.3%. And now the number of the week, which is 12. That is the number of calendar years that the S&P 500 has lost more than 10% since 1928, according to a report from Barry Gilbert of Carson Group. In other words, the market has been profitable or lost less than 10% in almost 88% of calendar years. There were four decades that didn't see any years of 10% plus declines, those being the 1960s, 1980s, 1990s, and the 2010s. How much does that history matter? Well, that's the topic of my next conversation when Motley Fool Money continues. Hi, I'm Neil. And I'm Ken. And we are from the Triviality Podcast, a pub trivia-style game show where a lack of seriousness meets a little bit of knowledge. Join us each week for an hour-long game of general knowledge trivia featuring special guests from around the world. plus tons of extra themed episodes. If you want to improve your trivia game, or you just want to scream at us in your car when we get easy questions wrong, then we're the show for you. Find triviality on all your favorite podcast apps. But you know that, because you're already listening to a podcast. We at The Motley Fool believe that the stock market is the best path to long-term wealth, and we have the historical data to back it up. But how much does history matter in our ever-changing world, and what past trends are likely to persist? Here to talk about that and much more is Ryan Dietrich, the chief market strategist at Carson Group, the co-host of the Facts Versus Feelings podcast, and one of my favorite sources of insightful or just fun stats about the market. Ryan, welcome to Motley Fool Money. Robert, thank you so much for having me. Obviously, a big fan of you and the Motley Fool. I mean, geez, like a lot of people, I started reading Motley Fool a long time ago when I got into this industry. So it's a real honor. You quote me all the time, so thank you for that. But it's an honor to get to talk to each other about how we see the world. So thank you again for having me. Thank you for those kind words. It is great to have you here. You know, in your podcasts, your articles, your social media posts, you provide just a regular stream of facts about historical trends. With much of that data going back to 1950s, sometimes as far back as the 1920s, what do you say to someone who says, you know, things are different today? Way back then, you know, they didn't have the internet. They didn't have low cost index funds, commission free trading apps in our pockets. we've transitioned from an industrial to a services economy. How much does history matter? That's a good one there. I love the quote by Mark Twain, history doesn't repeat itself, but it often rhymes. And you look at history, yes, there was no internet 50 years ago. Now, of course, we have AI. And there's always something out there. I think what's always true, though, is fear and greed. In April, when the stock market was down and was 20% and crashing, There was a lot of fear out there In the late 90s there was a lot of greed out there Those are things that are never gonna go away Maybe some of the I don know the people at the table so to speak whether it be computers or algorithms or hedge funds or high frequency trading all that stuff it is different than the past. But what gets us places, and we're going to get into some more of this, is earnings and profit margins and the Fed and all that stuff. That hasn't really changed, in my opinion. So we love using history. I think what I like about using history is it does show a guide, right? It's not gospel. I mean, it's a midterm year. Historically, midterm years don't do that well. Well, listen, we're still pretty optimistic when we get into that stuff, but it shows a guide. We've been through a lot of bad stuff before. We've had a lot of good stuff before. That's why I think it helps your average investor. I work with advisors, a carcer group of financial advisors every single day and their clients. And I think that's why it's so important to kind of show we've been through this before. Yeah, it's different, but at the same time, is it really that different? Fear and greed is still what drives markets. A lot of what you do in your writing is to say, okay, this is a current set of circumstances, and based on history, this is the likelihood that the market will go up. Here's the median and average return. How do you distinguish between trends that are valid versus a spurious correlation, which is borrowing from the title of one of your recent articles? Well, so you're saying the fact that an NFC team just won the Super Bowl by more than 10 points, the S&P 500 is higher 19 out of 21 years. You're saying that's not a reason to be bullish? I know. Playful, playful. I get it. By the way, the median return, almost 15%. Very good news. Yeah, very good news there. Or this is the year of the horse. And when animals walk on four legs, the market does a lot better than the times animals either use two or like a snake crawl. But nonetheless, nonetheless, or slither. I guess a snake slithers, is that what we call it? It doesn't matter. It doesn't matter. Yeah, that's the fun stuff. But at the end of the day, we look at a lot of data. I work with a guy named Sonu Varghese, our chief macro strategist, and he's my co-hosts on Facts Versus Feelings. And we look at the macro backdrop and we look at all these different factors. And it's not like one thing matters, right? I mean, we took a big top-down approach and focus on all this different stuff. And to us, again, it's like, what drives long-term stock gains? Well, I think it's earnings. I think it's earnings, right? And we have seen record earnings. We have seen record profit margins. We continue to see positive things. I get it. I know a lot of listeners probably feel this way because consumer confidence is very, very low. We just got some data and it's still very low. In some cases, consumer confidence is lower than it was during a hundred year pandemic. Yet retail sales are still strong. You know, auto sales are still strong. So it's this interesting dichotomy. People feel one way and do another. And to put a bow on this, we think following the hard data. Three years ago, Carson Group was pretty optimistic. Not many people were. We were laughed at. We were mocked for that optimistic few. We should follow the hard data. The hard data continues, in our opinion, to suggest things are strong. And again, that is what the Fed is up to. That is what fiscal policy is up to. That is earnings. All these different things we pay attention to. And it's fun to talk about animals on four legs. I get it, but no, we don't invest in that. We focus on the fundamentals. As you just hinted out there, you cover a lot of ground in your articles, podcasts, on social media. Macro, some fundamental, even some technical analysis. You mentioned earnings, but if you had to narrow it down to maybe three or five things that are most important to pay attention to, what would they be? Well, one of them I already kind of talked about, so we'll get that out of the way right now. Earnings, right? I mean, earnings are hitting record highs. Profit margins are hitting record highs. We're looking at some of the best revenue this fourth quarter that's wrapping up since we've seen in like four years. So that's an important one. That's number one. I'll probably do three. So that's number one. Now, I do have a, what we call a CMT. I'm not a country music person. That's not what that means. I'm a chartered market technician. So I do like to look at technicals, right? Relative strength, the seasonality stuff that I'm kind of known for. market sentiment, all these different things. And when you do that, there's something called an advanced decline line, Robert. It's a cumulative basis, how many stocks going up versus down every single day. Now, keep this real simple. That's market breadth. Market breadth leads price. Now, in the late 90s, market breadth peaked and started to roll over. That was a warning that something was wrong under the services. Literally, the only thing going up was tech stocks, right? In 2006, 2007, financials started to go down. A lot of other groups started to go down. There were warnings when market breath was weak. Where are we right now? Literally a week ago, the S&P 500s advanced decline, I hit a new all-time high. The New York Stock Exchange advanced decline, I hit an all-time high. Mid caps, all-time high. Small caps, 52-week high. What am I getting at? This is still a healthy, strong bull market being led by a lot of stuff. I get it. Technology is lagged. We understand that. But the lifeblood of bull markets rotation, we are seeing that. So earning strong, that's good. Advanced decline lines, market breath still solid, that's good. The third one that I would say is very important that we follow every day are the credit markets, right? If the credit markets see a monster under the bed, there'd be more stress in things like high yield spreads, BBB spreads, kind of keep this high level and fairly simple. We're not seeing that at all. I mean, in 2023, the regional bank crisis, high yield spreads really didn't move that much. It was saying, you know, it's not as scary as they're telling you on TV 2024 when we had the yen carry trade unwind and I know maybe some people remember this trust me For a few days in August of 24 it was a pretty scary period Japan was crashing global markets crashing The credit markets weren worried Even during the crash we had around Liberation Day the bottom line credit spreads hung in there. I mean, the credit markets weren't worried. So right now, we're worried, credit spreads are just fine. Okay, I know the AI stuff and the worries about software. Yes, maybe some credit spreads on some of the more specific technology companies have blown out a little bit. But overall, the credit markets are functioning just fine. Credit to me are the smartest people in the room. So credit is strong. Breath is strong. Earnings are strong. Those are three things that we've seen for, honestly, three years now. And knock on wood, they're going to continue to be strong. That's why we remain overweight equities and optimistic in 2026. So you're optimistic about the market. You're also optimistic about the economy. You don't see a recession on the horizon. You just highlighted many reasons for the optimism. Anything else people should be looking at or that you're factoring into the fact that you think the economy is probably going to be OK? Yeah. We talked a lot about the U.S., obviously, because we're U.S.-centric, but around the globe, I think it's really important to point this out. I mean, most investors know this. The rest of the globe has done really well relative to the U.S. over the past year or so. But on an economic front, we've seen a lot of growth coming from emerging markets, coming from developed international around the globe. I mean, we are seeing that. So it's really a kind of global story in terms of economic growth and stock market returns. And I think that's a real positive thing. You know, things that we like to look at, business investment. I mean, business investment is strong. AI investment. I mean, I know a lot of people talk about this. AI CapEx spending continues to be strong, showing virtually no slowdown. Consumption is still solid. You look at all these things together. Yeah, housing's taken away from GDP six out of seven quarters. Okay, we get it. That's the weak part out there. But the reality is we're about $37, $38 trillion economy. There's some cracks out there, sure. But overall, I think our economy is still really on firm footing. And the great part about it, the rest of the globe is really on firm flirting also. Let's comment here. Look at copper. Call Dr. Copper. Copper is flirting with all-time highs. People are gobbling up copper. It's hard to be bearish. The overall kind of global economy of copper was weak. You could be bearish if it was weak. It's not. And that's an important thing from our point of view as well. So overall, it's a nice global bull market and economy out there. One thing related to the economy that, of course, is of concern or that people pay attention to both economically and politically is inflation. Talk a little bit about why you think inflation will likely stay closer to 3% than the Fed's target of 2%. Well, yes, we can get out some rabbit holes with this one if you want. You know, the Fed's target's 2%. I mean, the Fed itself has said, yeah, that's, you know, wink, wink, nudge, nudge. It's probably not around 2%. We've been saying for a while that we think we're going to be in a 3% inflation world versus 2% inflation world. Now, I'll be very clear here. If inflation were to soar to 6% the next six months, yes, this would upset the apple cart. This would mean the markets are probably in trouble. We're probably going to have higher interest rates, not as many Fed cuts. That wouldn't be a bullish scenario. But you look at history, going back like 150 years, inflation's averaged about 3.5%. All right, so we're right, core PCE, the Fed's favorite measure of inflation, came in last Friday, right about 3% year over year. We don't think that's a bad thing. I mean, we've been flirting with 3% for a while now. And last I checked, the economy's doing pretty good. The stock market's hanging in there. And the reality is, look around, look, some of the previous answer, commodity prices. As everybody knows on this show, how are commodity prices doing? Yeah, they're higher, right? So that is kind of upward pressure on inflation. But the other part of this, something called shelter. Shelter is about 42% of core DCE. Keep this fairly simple. That is deflationary in a way. I mean, we are seeing housing prices, rent prices. Rent prices have been negative year over year from Zillow and apartment lists for like a couple of years now. And then the government's data is delayed. Keep it easy here. We think the shelter is going to kind of put a lid on inflation. So we're going to have inflation right around 3% or so. That's okay. We've been seeing it. That's where we are. But again, we manage billions of dollars on the Carson team, last comment here. And for years, we've been positioning for a world of a little bit more inflation, a little bit more being around 3% than 2%, maybe a little bit less bonds, maybe a little bit more stocks. We do have some gold. We have some managed futures. I say, if you drop it, it hits your foot and it hurts. You might want to own a little bit more in that your portfolio than you did say 10, 15 years ago. And that's how we position it. It's been working really well, honestly. We think it will continue with a little bit higher inflation world around 3%. You mentioned the sell-off in some stocks, some tech-related software stocks. And in your podcast, you reminded folks that a year ago, we were all talking about DeepSeek and what happened then. And that ended up being a pretty good buying opportunity. Is that generally what you think right now when you see some of these names going down 10%, 15%, 20%? Yeah, it is. Yeah. So on facts versus feelings, Sona and I talked about that recently. Just a year ago right now, we're all worried about DeepSeek. And the worry was there's this cheap Chinese chat bot that's going to come in and mess everything up and people aren't going to be investing in AI anymore, going to be investing in CapEx. That literally were the headlines a year ago. And now it's almost laughable when we see all the AI spending that we're still seeing. Now, where we are now, we think it's somewhat similar, right? We are throwing the baby out with the bathwater. Yes, there are companies, there are industries that are in trouble because of the revolutionary changes we're seeing with AI. But when it comes specifically to software, where you some really solid companies with some really solid moats that are still making a lot of money that have really pulled back I mean people say all the time well the market expensive I mean parts of the market are but last I looked software is the cheapest it been relative to the S&P 500 since 2013. All right. So that's a doubt. Hey, listen, I've tried to catch a falling knife before. Robert, maybe you have. It's not very smart because sometimes you cut yourself. It looks cool when you do it. But I mean, I think it makes sense for someone who has been waiting for parts of the market that are going to be cheaper. Software is really cheap. If you have some technology, what we did in the money we run, we sold a little bit of broad-based technology ETFs and bought a little bit of software because we think that's going to come back in six to nine months. We're going to look back and see, once again, our opinion, the large cap tech wasn't dead. The MAG-7 wasn't dead. Yes, this was volatile. Yes, this was unfortunate for a lot of investors that got over the top in large cap tech and MAG-7 to start this year, but that's why we stay diversified. That's why we don't always chase a shiny object. if it's the best group for three years in a row, like MAG7 was, it probably won't be the best group again. Last comment on this, Time Magazine had that cover, AI Architects with a Person of the Year, all the big leaders in AI. When I saw that cover, I was like, you know, that's a pretty high bar. I mean, AI is incredible. The technology we have is amazing, but that's a really, really high bar. And sure enough, MAG7's lagged a little bit. I don't think that's abnormal, but I do think there's some great opportunities for investors here to step up. With this old saying, stock market is the only place things go on sale. Everyone runs out of the store screaming. I'm seeing a lot of screaming running out of the store. I think savvy investors might use this opportunity and you look back and you're going to thank yourself down the road. Final question here. We're long-term investors here at The Motley Fool. We preach, buy and hold. A lot of what you write about is short-termish in nature. You talked about the seasonal stuff. You recently pointed out that we're in what you call the banana peel part of February. So it's all very interesting. But to what degree should long-term investors factor those types of things into their investing strategies? Oh, I'd say very little. That's a great question because, you know, the way we put it is this. For long-term investors, that's awesome. The best investors I've ever met are long-term investors that put money in their 401k, that put money in investing every two weeks, every month, and they look up in a couple of decades and made a lot of money. but it's not that easy. I mean, when you have a bear market like we did last April, even if you're a long-term investor, it's uncomfortable. It's so important to know that volatility is the toll we pay to invest. It's something we say a lot on the Carson team. The reality is on average, you see a 10% correction once a year, right? You see a bear market about every three, three and a half years. You see a 5% mild pull back four times a year and a 3%er seven times a year. A bunch of numbers, I get it. Just know that it will be scary. It will be uncomfortable, but long-term investing is one of the best ways to create wealth, one of the best ways to beat inflation. And a lot of times when it's scary is when you want to really kind of step up or at least, what's the old saying? Eisenhower, plans are useless. Planning is everything. If you come into the year expecting a 15% peak to trough correction at some point, because by the way, that's the average peak to trough correction since 1980, that's normal. When it happens, don't panic. When it happens, don't make a rash decision. You're not going to feel comfortable when you see your 401ks down a whole bunch. I mean, I get it. Everybody felt that way back in April. But the people that didn't panic, didn't sell, maybe even use this opportunity for those long-term gains. When you buy something on the cheap, that's the way to invest. All right. And this has been an enlightening conversation as expected. Thanks so much for joining us. I appreciate it, Robert. Thank you. And thanks to all the listeners out there. I can't wait to come back. Thank you. It's time to get it done. And I mean, really get stuff done. Just as we did this past week at The Motley Fool, because last week was our 16th annual Financial Health Week, during which we encourage employees to use company time to tackle personal finance tasks. During the week, we hold classes taught by both internal and external experts. We offer a checklist of money-related to-do items, and we offer rewards to fools who complete at least seven of those tasks. And those classes and to-do items cover just about everything, including budgeting, workplace benefits, investing, retirement, insurance, college planning, estate planning, and wealth defense. Now, you may not work at a company that has a financial wellness program like we have here at The Motley Fool, but you can hold your own financial health week or even just a day. When you clear your calendar, limit distractions and devote a few hours to those lingering money-related items on your to-do list. That investment of time will pay off for years to come in the form of a bigger portfolio, a stronger safety net, better awareness of the current state of your finances and what you can do today to get you closer to where you want to be. To quote productivity guru James Clear, your net worth is a lagging measure of your financial habits. And that, my friends, is the show. Thanks for listening, and thanks as always to Bart Shannon, the engineer for this episode. People on the program may have interest in the stocks they talk about, and The Motley Fool may have formal recommendations for or against, so don't buy or sell stocks based solely on what you hear. All personal finance content follows Motley Fool editorial standards and is not approved by advertisers. Advertisements are sponsored content and provided for informational purposes only. To see our full advertising disclosure, please check out our show notes. I'm Robert Brokamp. Fool on, everybody.
