Friday, October 10, 2008

Putting “panic” in perspective...

Chief Investment Strategist Corner October 8, 2008
by James Swanson, CFA

6 facts to help dispel the fear

1. In January of 1970, a bear market started that lasted until May of that year. The market
during that time fell 35.4%. In May, a bull market began that lasted until January 1973
and brought a 124% gain in stock values.

2. In April 1981, another bear market commenced that lasted nearly a year and brought a
24.7% decline. Then, in March of 1982, the market began to rise and continued doing
so until June 1983, bringing an overall gain of 71.7%.

3. July 1990 brought a downward market that lasted three months, until October 1990,
at which point equity prices had fallen 22.4%. Then, in the same month, a new, now
legendary, bull market took hold and lasted nearly eight years, until July 1998, delivering
a 330.7% gain for the market.

4. Dating back to 1975, 8 of the last 15 bull markets have started in the autumn months
of September, October, and November.

5. Since 1957 there have been 15 bear markets, as measured from peak to trough, and on
average they have lasted 10 months and brought an average decline of 29.4%.

6. The duration and degree of these bear markets were significantly less than the duration
and magnitude of bull markets. During the same period, there were also 15 bull markets,
which lasted, on average, 30 months and brought average gains of 112.5%.

0 thoughts: