Investors in stocks should have a long-term horizon: 10-15 or more years before they need that portion invested in stocks. Most consider 1 year long and 3 years an eternity.
Here are some interesting statistics on 3-year rolling periods since 1926 (there are many 3-year rolling periods when measured month by month). For example, July 1, 1929 through June 30, 1932 is one and August 1, 1929 through July 31, 1932 is another, etc.)
As measured by the S&P 500 (and this index was actually started in 1970 so interpolation is required for this data provided by the Center for Research in Security Prices and Bank of America):
Of the 25 worst 3-year periods in stock market history since 1926, 22 occurred in 1931, 1932 and 1933 (with market declines ranging from (43% ending 7/31/1933) to (81% ending 6/30/1932).
The worst two (only 2) 3-year periods of recent history were for the periods ending 2/28/2003 and 3/31/2003 (39% and 42% respectively) before the market took off again during late 2003 through October 2007.
The 3-year period (March 1, 2006 through February 28, 2009 just before the March 9, 2009 low from which the market posted sizeable double-digit gains), is measured as a loss of (38%).
As bad as this recent period has felt for most investors, it ranks as #25 out of the worst twenty-five 3-year rolling periods. Now there is some perspective.
As Samuel Dedio, head of U.S. Equities at Artio Global Management, stated "...even professional advisors were stunned during the downdraft..." but, in reality, it has not been the worst 3-year performance on record.
An Introduction
Hi. Welcome to BourGroup and my blog. Phil
Phil Bour is a CERTIFIED FINANCIAL PLANNER(tm) professional since 2004, a Magna Cum Laude college graduate and an accounting professional for over 35+ years. I love numbers, statistics and economic history.
I am also an Enrolled Agent (EA) to represent taxpayers before the Internal Revenue Service and to prepare tax returns.
"Phil"osophy: I believe that you can manage your money on your own (not necessarily through individual stock selection but through mutual funds, ETF's and other solutions) once you receive some one-time, professional guidance. Why pay annual fees when there may be little added value? For additional information, first read the "An Introduction" label at the left. Then move on to others.
Phil Bour is a CERTIFIED FINANCIAL PLANNER(tm) professional since 2004, a Magna Cum Laude college graduate and an accounting professional for over 35+ years. I love numbers, statistics and economic history.
I am also an Enrolled Agent (EA) to represent taxpayers before the Internal Revenue Service and to prepare tax returns.
"Phil"osophy: I believe that you can manage your money on your own (not necessarily through individual stock selection but through mutual funds, ETF's and other solutions) once you receive some one-time, professional guidance. Why pay annual fees when there may be little added value? For additional information, first read the "An Introduction" label at the left. Then move on to others.