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How Common are Large One Day Market Moves?

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I can see the lead on CNBC tomorrow morning already

Market Plummets 3%; Worst daily move since…(Cues dramatic music)

a week ago Monday. (Yanks needle off record)

What?!

Yes, for all the breathless talk on CNBC and Fox Business today, the last time we saw the market drop this much in one day was August 5th. Less than 2 weeks ago. You remember don’t you? Yeah, neither do I.

I was prepared to spend some time this afternoon going back through the year to find the last 3% drop in the market. 29 seconds later, voila.

In fact, August 5th was basically a twin of today. The market (S&P 500) fell practically the same amount and finished at essentially the same level, 2,844 v. 2,840, where it stands today

[Read more…] about How Common are Large One Day Market Moves?

The Day Godzilla Came to Wall Street

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Today, October 19, 2017 marks the 30th anniversary of ‘Black Monday’. On that fateful day in 1987 the Dow Jones Industrial Average, aka the Dow, had its worst single day drop in history. By the time the closing bell mercifully sounded at 4 p.m. the market had lost 508 points or 22.6% of its value. In our world today with the Dow at 23,000, that’s equivalent to a 5,100 point drop. [Read more…] about The Day Godzilla Came to Wall Street

Sequence of Returns – A Key Aspect of Investment Performance

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When reviewing investment alternatives, average annualized returns are important, but they don’t tell the whole story. The sequence of returns matter as well. And as we’ll see, while they can have an impact when accumulating savings, their effects can be more dramatic for portfolios in distribution, such as during retirement. [Read more…] about Sequence of Returns – A Key Aspect of Investment Performance

3 Investment Strategies That Beat the Market (Pt 2)

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Academic research has found 3 strategies, or factors, that have historically outperformed the S&P 500. The first is that smaller companies (aka small caps) tend to outperform larger companies. The next factor that excels over long periods is value. The third factor, price momentum, will be covered in a future post.

Value Investing – If it’s Good Enough for Warren…

Value investing is one oldest methods for investing in stocks. Benjamin Graham, known as the father of value investing, wrote one of the first academic textbooks on value investing with his seminal “Security Analysis”, first published in 1934. He followed that up with “The Intelligent Investor”, a classic bestseller which Warren Buffett has called, “By far the best book on investing ever written.”   [Read more…] about 3 Investment Strategies That Beat the Market (Pt 2)