2001 Crash, from Lowrisk.com

Walker Market Letter (FREE)

Welcome to Lowrisk.com! This study is the type of research, data, and charts you will find throughout this site. Stuff you have been looking for or wondering about, but haven't seen elsewhere. There is a lot here - make sure to stop by our home to see what's available. And make sure to subscribe to our 100% FREE Walker Market Letter.

2001 Bear Market ????

1997, 1998, and 1999 all had some dramatic times for the stock market. Each year featured days where the DJIA fell more than 500 points in a single day. And each year featured dramatic rallies after those drops. Everything changed in the year 2000. The Nasdaq had a genuine bear market, while the SP500 had a long, painful correction. So what is ahead in 2001? Here are a look at some of the recent major price swings:

We thought it might be interesting to look at the current market in terms of the historic bear markets that we feature on some of the other pages on this site. The chart below is a weekly chart of the S&P 500. This chart has been updated to reflect the new highs. The red lines show where a 10% correction and a 20% correction would take the market. The third line shows a 36% correction, which was the magnitude of the total drop in 1987.

This next chart is considerably more grim. Once again, this is a weekly chart of the S&P 500. The red lines correspond to the famous bear markets we highlight on Lowrisk.com. The first is the '87 crash (as in the chart above). The second line is the '73-74 bear market. The third line is the Nikkei bear market that started in 1990. The lowest line is the '29 crash. These lines show the type of dramatic losses that can occur in severe bear markets.

We didn't put these graphs and examples in here to scare you or make you hide your money under a mattress. The stock market is the place to be invested for the long run. Over long periods of time the stock market has had far greater returns than any other investment class.

But if you are invested or considering investing in the stock market you need to be prepared for bear markets. They will happen. And they will reduce the value of your holdings substantially. If you are a dedicated buy and hold investor, you must consider these bear markets. Will your steadfast resolve hold in the face of a 30% decline? How about a larger decline? If not, then you need to reconsider the buy and hold philosophy. And while you are considering, you might want to stop by and subscribe to the 100% FREE Walker Market Letter.