Officially a bear market folks (in the Dow). Before you panic, it is worth taking a look at the historical data. A -20% decline happens every 3 or 4 years so it is not that unusual. The Dow ETF is DIA.
Since 1900:
There have been 31, now 32, declines of -20% or more in the Dow (it takes 3 years at 10% returns to get back to even)
There have been 17 declines of over -30% (4 years to even)
There have been 10 declines of over -40% (6 years)
There has been one decline of over -50% (8 years)
Now that the market is down -20% from the highs, the better question is: “How bad is it going to get”?
While not for everyone, a tactical approach certainly looks like the right choice right now (just like it always looks like the wrong choice in bull markets).
Or, there’s about a 29% chance that a year will include a 20% drop; about a 55% chance that a 20 will continue into a 30% drop; about a 59% chance that a 30 will continue into a 40% drop; but only about a 10% chance that a 40 will turn into a 50% drop?
Interesting. OT (and I know you don’t like discussing sectors)-BUT, I wonder what this data looks like for the financials/M.C. banks.
Mike in GA
The market is sure to go up Monday. Barrons is extremely bearish this week end.
Mal
What do you mean by “tachtical”? Is that the same as technical?