To fully put the fourth quarter of 2008 into perspective, consider that between 1950 and 2007, a 57-year period, the S&P 500 experienced a total of 19 daily moves in excess of 5%. In that troubling period in 2008, we experienced 16 during a single quarter. But that was not the end of the volatility.
During the first half of 2009, the S&P 500 had another 72 days that it rose or fell at least 1%. Including the fourth quarter of 2008, of the 188 trading days over those three consecutive quarters, there were 122 days of plus or minus 1% moves, or nearly two of every three days.
I don't ever want to experience that type of volatility again; I doubt there are many investors who would. The truth is, I don't know what's ahead for the markets either.
We've seen some disappointing earnings numbers recently and the geniuses in Washington have done nothing to address the specter of the "fiscal cliff," so I understand the uncertainty.But I don't understand the logic utilized in declaring a market meltdown with a 3% decline in the S&P 500 over 3 days. Telling viewers how much they "lost" in their 401K's in a single down day does a disservice to investors in the same way telling them how much they'd "gained" after an up day. Sensationalism at its worst. Follow @JonMHellerCFA This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.
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