By the numbers

[W. Michael Chris]

My wife just rec'd this from her financial planning company . . . thought it was interesting . . . hoping for a better 2009.


By the Numbers

ROTTEN YEAR - The S&P 500 lost 37.0% (total return) during 2008, its worst calendar year performance since the stock index declined 43.3% in 1931 or 77 years ago. Its loss of 21.9% (total return) in the 4th quarter of 2008 was the 7th worst quarterly loss ever for the S&P 500 and its poorest quarterly showing in 21 years (i.e., since the 4th quarter 1987 produced a loss of 22.5%). The S&P 500 is an unmanaged index of 500 widely held stocks that is generally considered representative of the US stock market (source: BTN Research).


AFTERWARDS - In the 20 years following 1931 (i.e., 1932-51), the S&P 500 gained +11.7% per year on a total return basis. In the 20 years following the 4th quarter 1987 (i.e., 1988-2007), the S&P 500 gained +11.8% per year on a total return basis (source: BTN Research).


FIFTY-YEAR AVERAGE RETURN - The average annual total return for the S&P 500 over the last half-century (i.e., the 50-years from 1959-2008 ) is +9.2% per year (source: BTN Research).


UP vs. DOWN - The split between “up” and “down” days for the S&P 500 over the last 50 years is 53% “up” and 47% “down.” The split during calendar year 2008 was 50/50 (source: BTN Research).


BEARS - The S&P 500 has experienced 9 bear markets (i.e., peak to trough declines of at least 20%) in the last 50 years (i.e., 1959-2008 ) or 1 bear market every 5 ½ years. The average bear market “peak-to-trough” decline in the last half century has been 34.9%. From its all-time closing high of 1565 on 10/09/07, the S&P 500 fell 51.9% to its bear market closing low of 752 on 11/20/08 (source: BTN Research).


POST-BEAR RETURN - The average gain for the S&P 500 in the 1-year following the low close for the 8 bear markets that occurred in the last 50 years is +36.5%. Note that the closing low point of the 9th bear market from the last 50 years took place just 1 ½ months ago (source: BTN Research).


DOWN, THEN UP - Since closing at a bear market low of 752 on 11/20/08, the S&P 500 has gained +24.3% on a total return basis. The stock index closed at 932 on Friday 1/02/09 (source: BTN Research).


We’re all hoping that 2009 is a great year.

Information taken from “By the Numbers”, 01/05/2009 edition. Provided by Allianz Life insurance.