The Dow Jones Industrials started on 1Jan08 at 13265, rising to 14165 on 9Oct08, and ended at 8,776, a drop of 34% for the year. How does this compare with the Great Depression?
On 2Jan1929 the DJI started the year at 307. A peak of 381 was reached on 3Sept1929. By the end of year, the DJI fell to 244, for a yearly drop of only 21%. By the end of 1930, the DJI fell to 170, for a yearly decline of 30%. Then there was a further crash of another 58% in 1931. Thus, 2008 was worse than 1929 and 1930, but nothing like 1931. There was a small decline of 12% in 1932, where the DJI reached a low of 41 on July 8. Most don't realize that 1933 saw a jump of 69%, with the DJI at 100 on 2Jan1934. On 28April1942, more than seven years later, the market slid to 93. Recovery came slowly, for it took until 26Nov1954 when the DJI finally reached 383, just above the peak in 1929, a span of a quarter century.
How did the U.S.do relative to world markets?
London...........minus 31%
Frankfurt........minus 40%
Seoul..............minus 41%
Tokyo.............minus 42%
Paris...............minus 43%
Sydney...........minus 43%
Taipei.............minus 46%
Hong Kong......minus 48%
Singapore.......minus 49%
Shanghai.........minus 70%
Moscow..........minus 70%
As terrible as the year was for the U.S., the world did a lot worse.
MSNBC reported that the New York Mercantile Exchange had its worst year. At this writing, crude is at $43.88/barrel, about $10/bbl higher than the low reported a week ago.
Gold is at $883/toz, a 5% increase for the year. Thus, if, at the beginning of last year you had bought gold instead of stocks in anticipation of the recession, you would have been about 40% ahead today.
I noticed that the stock market might well have been hitting a possible low in mid-November, so I tried to quickly purchase some stocks from my E-Trade and Ameritrade accounts. Both times I was stymied by my general ignorance, as, first, it took me several days just to wire funds into my accounts. Thus, I just missed the DJI low of 7552 (high for the year was 14165 on 9Oct) on 20Nov. I bought Microsoft because it seemed like a good buy, and ProShares Ultra Basic Materials because a friend mentioned it was a derivative, and you might as well get into some of those. I added Lockheed Martin because they had announced an OTEC project for Hawaii, GE because it was the leading American wind energy conversion system manufacturer (and invented the modern windmill) and Boeing because their staff recently showed the most interest in a hydrogen powered aircraft. These are not exactly recommended as reasons for acquiring stocks, but I'm being loyal to firms pioneering sustainable energy projects, not a particularly smart thing to do when the price of oil was approaching all-time lows. Anyway, the bottom line is that over the six week period since I initiated the effort, my five purchases have inceased in value by a ratio of 1.0118, so, if I had invested a million dollars, I would have been ahead by $11,800. But, of course, my monetary sacrifice was somewhat less, so, let's say I made a bit more than one cent on a one dollar comparison basis.
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HAPPY NEW YEAR!
On 2Jan1929 the DJI started the year at 307. A peak of 381 was reached on 3Sept1929. By the end of year, the DJI fell to 244, for a yearly drop of only 21%. By the end of 1930, the DJI fell to 170, for a yearly decline of 30%. Then there was a further crash of another 58% in 1931. Thus, 2008 was worse than 1929 and 1930, but nothing like 1931. There was a small decline of 12% in 1932, where the DJI reached a low of 41 on July 8. Most don't realize that 1933 saw a jump of 69%, with the DJI at 100 on 2Jan1934. On 28April1942, more than seven years later, the market slid to 93. Recovery came slowly, for it took until 26Nov1954 when the DJI finally reached 383, just above the peak in 1929, a span of a quarter century.
How did the U.S.do relative to world markets?
London...........minus 31%
Frankfurt........minus 40%
Seoul..............minus 41%
Tokyo.............minus 42%
Paris...............minus 43%
Sydney...........minus 43%
Taipei.............minus 46%
Hong Kong......minus 48%
Singapore.......minus 49%
Shanghai.........minus 70%
Moscow..........minus 70%
As terrible as the year was for the U.S., the world did a lot worse.
MSNBC reported that the New York Mercantile Exchange had its worst year. At this writing, crude is at $43.88/barrel, about $10/bbl higher than the low reported a week ago.
Gold is at $883/toz, a 5% increase for the year. Thus, if, at the beginning of last year you had bought gold instead of stocks in anticipation of the recession, you would have been about 40% ahead today.
I noticed that the stock market might well have been hitting a possible low in mid-November, so I tried to quickly purchase some stocks from my E-Trade and Ameritrade accounts. Both times I was stymied by my general ignorance, as, first, it took me several days just to wire funds into my accounts. Thus, I just missed the DJI low of 7552 (high for the year was 14165 on 9Oct) on 20Nov. I bought Microsoft because it seemed like a good buy, and ProShares Ultra Basic Materials because a friend mentioned it was a derivative, and you might as well get into some of those. I added Lockheed Martin because they had announced an OTEC project for Hawaii, GE because it was the leading American wind energy conversion system manufacturer (and invented the modern windmill) and Boeing because their staff recently showed the most interest in a hydrogen powered aircraft. These are not exactly recommended as reasons for acquiring stocks, but I'm being loyal to firms pioneering sustainable energy projects, not a particularly smart thing to do when the price of oil was approaching all-time lows. Anyway, the bottom line is that over the six week period since I initiated the effort, my five purchases have inceased in value by a ratio of 1.0118, so, if I had invested a million dollars, I would have been ahead by $11,800. But, of course, my monetary sacrifice was somewhat less, so, let's say I made a bit more than one cent on a one dollar comparison basis.
-
HAPPY NEW YEAR!
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