Ask The Compound When Will the Stock Market Crash Again?
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Aug 19, 2026 They debate whether market crashes can still happen and why fewer recessions did not eliminate bear markets. They cover why individual stocks move faster today and how algos raise idiosyncratic volatility. They compare real estate and stocks, including leverage and tax differences. They discuss planning for aging parents, bridging senior housing costs, and how inflation alters withdrawal rules.
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Fewer Recessions But Structural Reasons Matter
- The US has far fewer and shorter recessions now due to policy, central banking, and a mature economy.
- Ben notes gold standard, slower Fed action, and emerging-market status historically made recessions longer and more frequent.
Fewer Recessions Haven't Eliminated Bear Markets
- Despite fewer recessions, historical bear-market frequency and drawdowns haven't fallen much since the 1920s.
- Ben shows bear-market counts and average drawdowns by period, finding similar magnitudes across decades.
Market Crashes Are Behavioral Not Just Economic
- Markets can crash for non-recession reasons because investor psychology drives prices faster than economic fundamentals.
- Ben emphasizes human nature and emotional extrapolation as persistent crash drivers even with better policy backstops.
