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Market declines and market reminders

By Dian Vujovich

Over the past few months I’ve thought that Apple would be a terrific buy at $95. Turns out, the stock dipped as low as $92-something for a nano-second or two today. Who knows how many lucky stiffs were able to get in at that price but one thing is for sure: They made some money in spite of today’s hefty market decline. Apple closed at $103.12.

No doubt about it, the markets are having their way with our money. But they always have. So while the hope for most people is that investing in stocks will be a positive and rewarding experience, the reality is, that’s not always the case.

Decide to take a long look back and research shows that market corrections happen nearly every year. According to Ned Davis Research, from 1900 through 2013, count the number of years and you’ll find that there have been the same numbers of corrections, 123, over that time frame. Re the number of bear markets, (index declines of 20 percent or more), the frequency has happened about once every three and one-half years. Or, 32 times.

As for where we stand currently, given the market index falls of 3-plus percent on Friday coupled with those of roughly 4 percent today and it’s clear the correctors are in charge.
That said, look at the index performances over the past 52 weeks and you’ll find things aren’t quite as ugly as many media market heads might cause you to think.

Here’s the deal based on the close of business today, August 24, 2015:

•DJIA closed at 15,871.35, down 3.57 percent
52-week high: 18,351.36
52-week low: 15,370.33

•S&P500 1,893.21, down3.94 percent
52-week high: 2,134.72
52-week low: 1820.66

•NASDAQ 4,526.25, down 3.82 percent
52-week high: 5,231.94
52-week low: 4,116.60

Russell 2000, 1,111.69 down 3.9 percent
52-week high: 1,296.00
52-week low: 1,040.47

Obviously, a 52-week look back is not the same as year-to-date performances. And yes, all the indices are in the tank, year-to-date. But two reminders all investors need to be mindful of no matter what’s going on in the markets, or with their individual stocks and portfolios, are keeping a cool head and a sound perspective.


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