It’s not often that you get a major sector/industry or country that is down for three years in a row, the last time it happened was in 2015 when Brazil (EWZ) had a losing streak of 5 years, here is a POST I wrote about it in 2015.
Today we have three ETF’s that are down 3-years in a row; XOP, OIH, XES. All three ETFs are in the same sector (oil), and the chances are high that they will move together as one.
“The time to buy is when blood is running in the streets.”—Baron Rothschild
It feels much better to buy assets while they’re rising, but it’s usually smarter to buy after they’ve been fallen for a while.”— Howard Marks
According to the Ivy Portfolio, the median country returns from 1903 to 2007 is 10.65% (all years), and 14.9% after three down years in a row. Take a look at the returns below (Table 7.9) for asset class average returns after three down years in a row; it’s eye-opening.
It is extremely rare to find an asset class that is down three years in a row, but here we are, and the opportunity is here.
I am sure that it won’t be a straight move higher, and maybe three down years in a row could turn into four or five years, in all investments, you will have ebb and flow, but all we are looking to do is have to odds stacked on our side, and starting with ETFs that are down 3-years in a row is a good start.