Volatility Continues
November was another volatile month. The market rose and fell more or less in synch with the rising and falling prospects within the European Union. In a month of 21 trading days, the market rose or fell by more than 1% 11 times. Seven times the market changed by more than 2%; twice we saw changes of 3% or more. The net effect was that as we neared the end of the month, the market was once again underwater for the year. The month and year were "saved" by the last three trading days when the market tacked on gains of more than 800 points. The DJIA (Dow Jones Industrial Average) ended the month at 12,045.68.November, Quarter-To-Date, Year-To-Date & Recovery-To-Date Review
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 2119 points (15.0%)
- From Crash Low of 6547 on March 9, 2009: Up 5499 points (84.0%)
- Year-to-Date From 2010 close of 11,578: The Dow is up 468 points (4.0%)
- From 52-week High of 12,811 on April 29, 2011: the Dow is down 765 points (6.0%)
- Third Quarter-to-Date From 10,913 at the end of 2Q11: Up 1132 points (10.4%)
- From the New 52-Week Low of 10,655 on October 3, 2011: Up 1390 points (13.0%)
- From Prior Month Close of 11,955: The Dow is up 90 points (0.8%)
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 over 80% since then and still be well below the all-time high, see The Importance of Avoiding Large Losses.
The Next 10 Years
Since this month's close is quite close to last month's close, my stock market projection model continues to project below average 10-year returns in the 5-6% range.Related Articles & Posts
100 Years of Stock Market History: Includes 100-year chart and discussion of the long flat periods.Dow Yearly Returns: 1929-2010 : bar graph of yearly total returns (i.e., including dividends)
What has the range of 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
Who's Afraid of a Sideways Market?: Interesting perspective on long flat periods from Morningstar.
Three Scenarios for the Economy (and the stock market) includes links to additional relevant articles by Bill Gross, Nouriel Roubini, Jeremy Grantham, John Hussman, and others.
For lists of other popular posts and an index of stock market posts, by subject area, see the sidebar to the left or the menu bar at the top.
Copyright © 2011. Last modified: 12/31/2011
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boy when you look at the real estate chart, that is seriously regression to (beyond) the mean
ReplyDeletewhere do i read your comments about the future of the stoclk market?
Re "the future of the stock market." I don't really have much along those lines. Probably the closest would be something like Three Scenarios for the Economy, or The 10-Year Stock Market Projection. Otherwise, you can pretty much draw your own conclusions based upon where we are compared to historical norms and trends.
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