|Dow Index Monthly Closes Through November, 2012|
CliffhangersThe month started with a cliffhanger of a presidential campaign. The candidates arrived at election day neck and neck in the popular polls. However, on election night the election quickly turned into an electoral college rout. The next day, the Dow reacted with its only 2% loss of the month -- though, in fairness, not all of the loss was in reaction to Obama's reelection.
Now, finally, all attention seems to be focusing on the fiscal cliff that I first wrote about last summer. This draconian combination of scheduled tax increases, budget cuts, and a couple of other nasty things threatens
to derail an already fragile recovery. Is our nation's leadership so dysfunctional that in a month or so we'll all be plunging off that cliff? The markets appear to think they'll probably work it out. However, there's still enough uncertainty that we get a little pop every time things actually look promising.
Otherwise, it was another relatively uneventful month in the markets. The DJIA (Dow Jones Industrial Average) drifted downward, and closed November at 13,025.58 (see chart above. Click to expand). The Treasury's ten-year constant maturity rate ended the month at 1.62%.
Where Are We Now? November 2012, Year-to-date, and Recovery-To-Date Results
Here's where we stand vs. some key dates and milestones:
- From All-Time High of 14,165 on Oct 9, 2007: the Dow is down 1139 points (8.0%)
- From Crash Low of 6547 on March 9, 2009: Up 6479 points (99.0%)
- From one year ago close of 12,045 at end of November, 2011: the Dow is up 980 points (8.1%)
- From the 52-Week Low of 11,766 on December 19, 2011: Up 1259 points (10.7%)
- Year-to-Date From 2011 close of 12,218: The Dow is up 808 points (6.6%)
- From the 3rd Quarter Close of 13,437: down 412 points (3.1%)
- From the 52-Week High of 13,610 set on October 5, 2012: down 585 points (4.3%)
- From Prior Month Close of 13,096.46: down 70.9 points (0.5%)
For other recent results, see October 2012 stock market results and 2012 Year-end Update.
Note: At the end of the crash, the Dow had lost about 54% of its value (from the all-time high). For an explanation of how it can be up almost 100% since then and still be below the all-time high, see The Importance of Avoiding Large Losses.
The Next 5-10 Years
My stock market projection model continues to project below average 10-year returns. The "official" 2012 10-year projection as of January was for 5.6%/year for the next 10 years. As of the end of November, my interim/monthly model estimates returns still in the mid-5% range.
My interest rate forecasting model projects rates increasing over the next five years, with 1-year rates ending at about 2%, and 5-year rates ending at about 2.5%.
Related Articles & Posts
100 Years of Stock Market History: Bigger perspective on "Where are we Now?." Includes 100-year chart and discussion of the long flat periods.
Dow Yearly Returns: 1929-2011 : bar graph of yearly total returns (i.e., including dividends)
What has the range of market returns (minimum & maximum) been for 1,2, 3, ... 100-year periods?
10-Year Stock Market Projection shows how expected returns have changed over the last 10 years.
100 Years of Interest Rate History: graph of Treasury Note interest rates since 1900
Where Are Interest Rates Headed? My unique methodology & spreadsheet for forecasting interest rates.
CBO report warns of U.S. falling off 'fiscal cliff' from USA Today.
For lists of other popular posts and an index of stock market posts, by subject area, see the sidebar to the left or the blog header at the top of the page.
Copyright © 2012 Last modified: 1/1/2013