Volatility shows how rough it can be on stock prices

By Dian Vujovich

What a heck a week last week was for anyone who can’t get enough of watching what’s happening on Wall Street. Thank heavens for weekends. As we begin this week, both the Asian and European market indices closed down. How any of that will impact our markets remains to be seen.

But to recap, nearly one-month ago, on April 26, the DJIA closed at its highest point since the market hit bottom on March 9, 2008. Since that April high it has fallen nearly 1000 points falling by triple digits during many trading sessions.

As we begin this week, let’s look at the performance numbers of a few stocks and mutual funds.

As you know I’ve been keeping an eye on the companies in the DJIA selling for under $20 a share for nearly a year now. At the end of the trading day on Friday, May 21, 2010. there were four of them. The same names, incidentally, we’ve seen before. Alcoa, (AA), closed at $11.35 a share, over the last 52-weeks it has traded as low as $8.70 a share and as high as $17.60.

Bank of American (BAC) closed at $15.99, its 52-week range $10.57 to $19.86. General Electric (GE) has traded between $10.50 per share and $19.70 over the last 52 weeks and closed at $16.42 And Pfizer (PFE) ended yesterday’s trading session at $15.40. Trading range for the past year has been between $13.94 and $20.36. All numbers are according to Yahoo Finance.

In the mutual fund arena, Lipper year-to-date figures through May 20 show that the average Diversified Equity Fund was down 2.09 percent. One week earlier, on May 13th, the average fund under that heading was up nearly 6 percent. Small-Cap Value funds had gained the most in that grouping on May 20th —the average one was up 4.09 percent—one week earlier the average small-cap value fund was up 14.75 percent.

The worst performing fund type under the Diversified Equity Fund heading as of May 20 were Large Cap Growth funds, down on average 5.38 percent.

Move to the Sector Equity Funds heading and Real Estate Funds had performed the best —up on average 4.8 percent. The worst performers were Global Natural Resources Funds—off 14 percent on average.

We all know that the world is in a bucket of hurt financially as witnessed by the performance of the 23 different types of funds that fall under the Lipper’s World Equity Funds umbrella. All types were underwater. The worst performance coming from Latin American Funds, off 17.8 percent. The best of these worst were Japanese Funds, down less than 1 percent at 0.8 percent.

Some pros are saying that the most recent bull market is officially over. Others, that last week’s fall was merely a much-needed correction. Still others think that prices have further to fall. Those with money on the sidelines are seeing great buying opportunities. Then there are the “sell in May and go away” thinkers. For those who actually followed that adage, sure hope they sold early in the month.

Then again, who knows?

Every minute, hour and day is a new one for market traders. Every year, a new one for the short-term buy and hold person. You’ll no doubt find the market’s volatility a lot easier to handle if you know which one you are. In other words, as lyrics from The Who so appropriately ask: “Who are you? Who who who who?”