{"id":2966,"date":"2010-03-18T11:50:00","date_gmt":"2010-03-18T11:50:00","guid":{"rendered":"https:\/\/mmm.9dotdigital.ca\/?p=2966"},"modified":"2025-03-27T15:49:00","modified_gmt":"2025-03-27T15:49:00","slug":"dow-history-suggests-duller-equity-market-prospects","status":"publish","type":"post","link":"https:\/\/mmm.9dotdigital.ca\/?p=2966","title":{"rendered":"Dow history suggests duller equity market prospects"},"content":{"rendered":"

The Dow Jones industrial average fell by 54% from peak to trough in the bear market between October 2007 and March 2009. The Dow has declined by 45% or more on seven prior occasions since 1900 – see table. Six of these declines were in the 45-55% range, the exception being the depression bear market of 1929-32, when prices dropped by 89%.<\/p>\n

The Dow reached its low on 9 March 2009 and had risen by 61% by 9 March 2010. This is in the middle of the 42-85% range of first-year recoveries after the six prior big bear markets, excluding the 1929-32 decline. The mean rise across these recoveries was 59%.<\/p>\n

The Dow’s performance was mixed in the second year after the troughs of these prior cycles. The change in prices ranged from a fall of 8% to a rise of 22%, with a mean increase of 7%. In one case – the recovery after the 1973-74 bear – a strong second-year gain followed a below-average rise in the first year.<\/p>\n

Historical evidence, therefore, suggests that equity markets are entering a less dynamic period, although any downside risk should be modest against the background of a continuing economic recovery. This conclusion is consistent with evidence of less favourable global liquidity conditions discussed in yesterday’s post.<\/p>\n\n\n<\/col>\n<\/col>\n<\/col>\n<\/col>\n<\/colgroup>\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
Dow Industrials bear markets compared<\/strong><\/span><\/td>\n
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<\/span><\/td>\n<\/tr>\n

<\/span><\/td>\n		Duration<\/span><\/td>\nMagnitude<\/span><\/td>\nChange<\/span><\/td>\nChange<\/span><\/td>\n<\/tr>\n

<\/span><\/td>\n
<\/span><\/td>\n
<\/span><\/td>\n		first year<\/span><\/td>\nsecond year<\/span><\/td>\n<\/tr>\n

<\/span><\/td>\n		months<\/span><\/td>\n%<\/span><\/td>\n%<\/span><\/td>\n%<\/span><\/td>\n<\/tr>\n

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<\/span><\/td>\n<\/tr>\n
June 1901 – November 1903<\/span><\/td>\n29<\/span><\/td>\n-46<\/span><\/td>\n59<\/span><\/td>\n22<\/span><\/td>\n<\/tr>\n
January 1906 – November 1907<\/span><\/td>\n22<\/span><\/td>\n-49<\/span><\/td>\n65<\/span><\/td>\n13<\/span><\/td>\n<\/tr>\n
November 1909 – December 1914<\/span><\/td>\n61<\/span><\/td>\n-47<\/span><\/td>\n85<\/span><\/td>\n-3<\/span><\/td>\n<\/tr>\n
November  1919 – August 1921<\/span><\/td>\n22<\/span><\/td>\n-47<\/span><\/td>\n56<\/span><\/td>\n-8<\/span><\/td>\n<\/tr>\n
September 1929 – July 1932<\/span><\/td>\n34<\/span><\/td>\n-89<\/span><\/td>\n156<\/span><\/td>\n-8<\/span><\/td>\n<\/tr>\n
March 1937 – April 1942<\/span><\/td>\n62<\/span><\/td>\n-52<\/span><\/td>\n44<\/span><\/td>\n2<\/span><\/td>\n<\/tr>\n
January 1973 – December 1974<\/span><\/td>\n23<\/span><\/td>\n-45<\/span><\/td>\n42<\/span><\/td>\n17<\/span><\/td>\n<\/tr>\n

<\/span><\/td>\n
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<\/span><\/td>\n
<\/span><\/td>\n<\/tr>\n
October 2007 – March 2009<\/span><\/td>\n17<\/span><\/td>\n-54<\/span><\/td>\n61<\/span><\/td>\n
<\/span><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n","protected":false},"excerpt":{"rendered":"

The Dow Jones industrial average fell by 54% from peak to trough in the bear market between October 2007 and March 2009. The Dow has declined by 45% or more on seven prior occasions since 1900 – see table. Six of these declines were in the 45-55% range, the exception being the depression bear market […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3],"tags":[],"class_list":["post-2966","post","type-post","status-publish","format-standard","hentry","category-money-moves-markets"],"_links":{"self":[{"href":"https:\/\/mmm.9dotdigital.ca\/index.php?rest_route=\/wp\/v2\/posts\/2966","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/mmm.9dotdigital.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mmm.9dotdigital.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/mmm.9dotdigital.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/mmm.9dotdigital.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=2966"}],"version-history":[{"count":1,"href":"https:\/\/mmm.9dotdigital.ca\/index.php?rest_route=\/wp\/v2\/posts\/2966\/revisions"}],"predecessor-version":[{"id":5275,"href":"https:\/\/mmm.9dotdigital.ca\/index.php?rest_route=\/wp\/v2\/posts\/2966\/revisions\/5275"}],"wp:attachment":[{"href":"https:\/\/mmm.9dotdigital.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=2966"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mmm.9dotdigital.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=2966"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mmm.9dotdigital.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=2966"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}