Last Monday the Dow Industrials fell by 777 points after the US Senate didn’t pass the 700 billion bailout package. Most news reporters informed the public that Mondays drop in the oldest US stock index was the largest one day point drop ever. They were correct in this one. The issue is that this was not the largest drop in percentage terms. In other words even though last Mondays drop was higher than the one on Black Monday in 1987, it was much lower in percentage terms. Armed historical with data from yahoo finance going back to 1928 I isolated the 20 largest one day percentage drops in the Dow Industrials. It seems like the largest point drop ever turned out be the 18th largest percentage drop. You could check out the original spreadsheet from this link.
The average performance one year after a large one day percentage drop was 6.46% (without accounting for dividends).
Relevant Articles:
- Average Durations of Previous Bear Markets
- Dow 370,000
- The ultimate passive investment strategy
- "Determining Withdrawal Rates Using Historical Data"
Popular Posts
-
I review the list of dividend increases every week, as part of my monitoring process. This exercise helps me monitor existing holdings, but ...
-
I review the list of dividend increases as part of my monitoring process. This process helps me review how the companies I own are doing. It...
-
Yield on Cost is a fascinating metric. It calculates the dividend yield based on the original cost at the time of purchase. Yield on cost i...
-
My retirement strategy is focused on living off dividends. Dividends are more stable, predictable and reliable than capital gains. Dividends...
-
A famous saying goes that there are two things certain in this world: death and taxes. While I am pretty sure I can’t escape death, I know t...
-
As a shareholder, there are two ways to make profits from a stock. The first way is when you sell your stock for a gain, after it has incre...
-
I review the list of dividend increases as part of my monitoring process every week. This exercise helps me review the performance of existi...
-
A pattern of steady dividend payments and dividend increases is only possible if a business can generate enough cashflows to support operati...
-
Planning your retirement is one of the most challenging exercises in the world. There are plenty of ways, methods and advisors, who try to i...
-
The employer match is one of the best features of workplace retirement accounts such as 401 (k) plans ( Pre-tax and Roth). It’s a contributi...