Here are some "rough estimates" of percentage declines and, more importantly, the amount of time to recover from past major market declines as measured by the DJIA - Dow Jones Industrial Average since 1940:
1946 (23%)...recovered in about 4 years
1957 (20%)...recovered in about 1 year
1962 (27%)...recovered in less than 2 years
1966 (25%)...recovered almost to previous high in 3 years, but then dropped again
1969 (36%)...recovered in about 4 years
1973 (45%)...recovered in almost 3 years, but then dropped again
1976 (27%)...recovered in 5 years, only to drop again
1981 (24%)...recovered in less than 2 years
1987 (36%)...recovered in less than 2 years (includes biggest one day drop of 22%)
1990 (21%)...recovered in less than a year
1998 (20%)...recovered in about a 1/2 year
2000 (37%)...recovered in 7 years, finally only to drop again
2008 (15% and still unknown past 1/22/08)...when will we recover to the 14,100 high of last year?
On average, since the 1960's, two declines per year of more than 20% with recovery times. The media will continue to report this news as if it is something unusual but it really is not. No fun as you go through it and wonder but markets do recover historically.
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.