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The 2008 Crash
The action in the markets the past few weeks has certainly been historic so I thought it was a good time to begin to recognize some of the data, to be preserved for posterity. Of course in another few weeks I’ll probably have to update this.
Dow Jones Industrial Average
The Lost Decade…1998-2008
10/9/02……776.76 [market low]
10/9/07…...1565.15 [all-time high]
The Dow, Nikkei, and FTSE
[Thanks to my extensive archives, I’ve picked out some key market dates. 1990 was the short, sharp bear market surrounding the time of Saddam’s invasion of Kuwait, 8/2/90; 1/14/00 was the all-time peak in the Dow Jones at the time; 10/11/02 was the week of major market lows; the week ending 10/12/07 was one in which the Dow hit its all-time high of 14164; and 10/10/08 was another marking the lows, at least for now, in the vicious bear market of 10/07-10/08.]
*Who would have thought the Dow and Nikkei would cross one day back in July 1990?
The Carnage, year-to-date, 12/31/07-10/10/08
American Funds / Washington Mutual -34.6%
Ah yes, “Sell in May and go away”…until November, that is. The best six months strategy, 11/1-4/30, has certainly worked out over the years. First discovered by Yale Hirsch of Stock Trader’s Almanac fame, $10,000 invested May 1-Oct 31 would have given you a whopping $10,341 between 1950 and 2006 as measured by the Dow Jones, while the same $10,000 would have grown to $588,413 if you were only invested between Nov 1-Apr 30. [The past year, though, both periods will end up down.]
And just a reminder, the reason why the above has played out as it has is because Nov., Dec., Jan., Mar., and Apr. are the five best months of the year over the same 1950-2006 (Apr. 2007) period.
Lastly, many an October has marked a major low, including 1987, 1990, 2002, and, possibly, 2008.