Bogleheads

[DaleMaley]

This week's issue of Business Week has interesting graphs of the 6 biggest U.S. Bear markets:




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Dale
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Most investors, both institutional and individual, will find that the best way to own common stocks is through an index fund that charges minimal fees. – Warren Buffett

[richard]

I'm partial to the charts at www.dshort.com, including

[Robert The Bruce]

It is possible that we'll see a decade or more with little change as seen from 1966 to 1982. The 1973 decline was just a small part of a lackluster 16 years when the Dow (before dividends) lost 18%. See:
http://www.chartresearch.com/SecularDow6682.htm

I admit, it does appear there were plenty of opportunities to rebalance during those 18 years.
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The stone age didn't end for lack of stone.

[nisiprius]

I'm no cheerleader for stocks, but I wish to heck the press would quit using nominal values of capital, without reinvestment, as their measure of market recovery. It's not as good as the cheerleaders would suggest, but it's not as bad as that article says.

I decided on my personal standard as to what should be considered recovery. I object strongly to the idea that stocks recovered by 1936 for various reasons, but, corrected for inflation, someone who invested in 1929 and held, reinvesting dividends, to 1942, was not only made whole but stayed whole, and by 1954 had earned an average 5% real on their investment, which also pretty much stuck.

In other words, I like 1954 as a year, but to my way of thinking the stock market recovered by 1942 and didn't just recover, it made up lost ground by 1954.
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Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness; Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.

[nisiprius]

[quote="nisiprius"]I'm no cheerleader for stocks, but I wish to heck the press would quit using nominal values of capital, without reinvestment, as their measure of market recovery. It's not as good as the cheerleaders would suggest, but it's not as bad as that article says.

I decided on my personal standard as to what should be considered recovery. I object strongly to the idea that stocks recovered by 1936 for various reasons, but, corrected for inflation, someone who invested in 1929 and held, reinvesting dividends, to 1942, was not only made whole but stayed whole, and by 1954 had earned an average 5% real on their investment, which also pretty much stuck.

In other words, I like 1954 as a milepost, but to my way of thinking the stock market recovered by 1942. By 1954 it hadn't just recovered, it pretty much made up lost ground.
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Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness; Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.

[Chuck T]

Dale and Richard

Thanks for the great graphs. Hopefully things will turnaround sooner rather than later such as the great depression when the markets did not recover their 1929 level until 1954. If that is the case, I probably won't live to see it. Cheers

[bob90245]

In trying to determine recovery from 1929 peak, I added line aids to the Credit Suisse chart:



Unaltered chart HERE

[Les]

[EmergDoc]

As long as we're posting charts, I thought I'd post this one:

http://www.epmonthly.com/image...._chart.pdf

I don't recall exactly how to put the picture in the thread if someone can help with that.
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1) Invest you must 2) Time is your friend 3) Impulse is your enemy
4) Basic arithmetic works 5) Stick to simplicity 6) Stay the course

[DaleMaley]

[RockyMountain]

There has been a lot of discussion about whether our current downturn will turn out to be a depression. In the Great Depression, stocks fell 89.2%. Currently, we're down "only" 56.3 %. To match the GD, stocks would have to fall another 75% FROM HERE. Put that in your pipe and smoke it.

[stratton]

I'll post one of my favorite short articles again...

Winning Investment Style in a Bear Market

[Les]

[grabiner]

[Rodc]

[Adrian Nenu]

Thanks for the great charts. If we throw out the extreme 1929-1932 monster bear market, the average significant bear market decline is about 50%.

Adrian
anenu@tampabay.rr.com