COMMENT: The bull market is dead.
As fresh falls this morning take the NZX-50's returns for 2018 below four per cent, it's time to recognise the decade-long equity boom we've enjoyed is over.
For the foreseeable future we can no longer expect to see double-digit returns on our KiwiSaver funds.
Right now any growth at all looks good.
"No, no," I hear you say. "It's just taking a breather. It's resting."
Okay (and with apologies to Monty Python fans), I understand that until we are in a bear market (a fall of more than 20 per cent from peak) you could argue that we are still technically in the bull market.
But in my opinion you'd be banging that bull market against the pet shop counter like a stiff parrot.
I'm sorry, but it has ceased to be a bull. It is deceased. It has expired. It is an ex-bull market.
Regardless of whether the major indexes keep falling into bear territory or settle for a series of smaller corrections, the bull market has lived its natural life.
The odds on reaching fresh to new highs look very slim indeed.
The NZX-50 peaked at 9375 points in September. It last traded at 8666, off 7.5 per cent from there. It is currently on track for an annual return of about 3.2 per cent.
In line with a bank term deposit rates.
The S&P 500 peaked at 2930 points in September and is currently off about 11 per cent from there.
It is now in negative territory for the year - down 3.5 per cent.
The idea – as promoted by Donald Trump - that it might be revived if the US Federal Reserve pauses its rate hikes is the equivalent of Michael Palin rattling the cage in that dead parrot sketch.
It is quite possible that Trump, and US political forces desperate to see Wall Street end on a high, will do that.
The US President suddenly seems to be pulling out all the stops to deliver some good news on the China trade war.
All that can possibly deliver is a zombie market - staggering in to the new year.
A real stock market rally, a new bull market underpinned by fresh productivity, improved profits and investor enthusiasm for shares, looks a long way away.
Whatever happens, the post-GFC conditions that drove double-digit market returns for almost a decade are no longer with us.
We are in the last phase of this economic cycle.
Thankfully it hasn't been signalled as clearly as it might have been - with a recession or a major market crash.
At least not yet. And we can hope.
But as investors – and for most of us that means KiwiSaver or other managed funds – we are going to have to get used to different-looking returns.
Market watchers in the US are nervous about the yield curve on US Treasury Bonds.
The yield curve on bonds of different maturation dates has historically been a good predictor of recession.
When bond investors get paid more to hold shorter-term US government debt than they do for holding it for a longer term it is a bad sign.
It means there is very little confidence in the longer-term economic outlook.
We've seen the yield on the five-year US Treasury note fall below the yield on the three-year note.
A broader inversion between the two-year and 10-year notes look likely as the difference between those rates is narrowing.
We ended 2017 with a great deal of global optimism.
In January the International Monetary Fund outlook was talking up a golden period of synchronised global growth - i.e. all the major economies firing at once.
Against a backdrop of geo-political unrest that golden patch was all too brief.
The IMF delivered yet another warning this week.
The "storm clouds are building", David Lipton, first deputy managing director of the IMF, said.
But the world was not yet in a good place to cope, he said. There is too much debt and central banks haven't got the fire power they had in 2008.
I saw a hopeful headline on major US finance site: "The yield curve is flattening. But the party isn't over yet."
I understand the sentiment. Things don't always have to collapse into financial crisis.
Bull markets and economic cycles can just run out of steam.
Historically there's often been a delay of months or even years between inverted yield curves and subsequent bear markets and recession.
But the fun bit of the party is over. It's 4am and the bond traders have put Leonard Cohen on the stereo.
We are now in a phase that warrants more caution.
It is a time to seriously consider the financial outlook and how we are placed - whether that means government, corporate or personal finances.
In New Zealand, the consensus economic outlook remains solid. Forecasts are for GDP growth to stay above 2.5 per cent. The Government has money in the tank and unemployment is low.
That's not a reason to be less cautious. It's an opportunity to pay down debt and prepare.
Now is the time to follow the advice of the IMF's Lipton and "fix the roof" before the deluge comes.