Wednesday, 25 February 2009

S&P 500 declines - 1929-31 and 2008-?

Bespoke Investment are experts at presenting statistical data on the markets and I shall quote an excerpt from a recent article which can also be found here

There have now only been two periods in the history of the S&P 500 where the index declined more than 50% from an all-time high -- 1929 and now. In the first chart below, we highlight the percentage change from the S&P 500's most recent all-time high to its current level, along with the change from the 1929 all-time high over the same number of days. Although the front-page headline in the WSJ today is "Stocks Drop to 50% of Peak," the S&P 500 was actually down 50% from its peak back in November. It just recently hit the 50% threshold again.

What is ominous about the first chart is that only four trading days separate the first time that the S&P 500 went 50% below its all-time high. Ultimately in the bear that started in 1929, the S&P 500 dropped a whopping 86.19% from its all-time high. This low occurred 679 trading days after the all-time high was reached, or about two years and nine months. The current decline has lasted one year and four months.

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