Posted by sbaxman111 on 9th of Aug 2017 at 11:34 am
On this day 10 years ago, money markets
started to seize up as BNP Paribas closed three funds linked to US
mortgages, requiring heavily-coordinated central bank action that
launched an extraordinary period of central bank activity that is
still in full swing today.
The SPX hit a high of 1503.89 that day (8-9-07)
and then fell back to an intra-day low of 1370.60 on 8-17-07 before
starting an ECB/Central Bank fueled rally that carried it to a then
all time peak on 1576.09 on Oct 11th - some 16 months later the SPX
would bottom at 666.79 on 3-5-09 - a 57.69% decline. It would then
take until 4-10-13 to surpass that 1576 peak once again.
Not counting dividends, the current SPX level of 2470 this
morning means that the SPX has averaged 5.0867% a year over the
last 10 years. With dividends CNBC reported this morning that this
10 year annualized return was over 7+% a year. The commentators
used this data to once again pronounce that investors need to just
"hang in there" as this 10 year period again proves that "the
market always comes back". According to these 'experts" trying to
go in and out of the market just doesn't work.
I would suggest that there are very few
"investors" who could psychologically take a 57% hit to their
account, and would "just hang in there" and have enough faith to
wait 4 years for the market to break even again.
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Financial Crisis Began 10 years ago today
Posted by sbaxman111 on 9th of Aug 2017 at 11:34 am
On this day 10 years ago, money markets started to seize up as BNP Paribas closed three funds linked to US mortgages, requiring heavily-coordinated central bank action that launched an extraordinary period of central bank activity that is still in full swing today.
The SPX hit a high of 1503.89 that day (8-9-07) and then fell back to an intra-day low of 1370.60 on 8-17-07 before starting an ECB/Central Bank fueled rally that carried it to a then all time peak on 1576.09 on Oct 11th - some 16 months later the SPX would bottom at 666.79 on 3-5-09 - a 57.69% decline. It would then take until 4-10-13 to surpass that 1576 peak once again.
Not counting dividends, the current SPX level of 2470 this morning means that the SPX has averaged 5.0867% a year over the last 10 years. With dividends CNBC reported this morning that this 10 year annualized return was over 7+% a year. The commentators used this data to once again pronounce that investors need to just "hang in there" as this 10 year period again proves that "the market always comes back". According to these 'experts" trying to go in and out of the market just doesn't work.
I would suggest that there are very few "investors" who could psychologically take a 57% hit to their account, and would "just hang in there" and have enough faith to wait 4 years for the market to break even again.