Market Finishes Worst January in its History, Gloomy 2009 Outlook
Not only did the Dow Jones finish its worst January performance in its history last week, but the negative return in the first month of the year also foreshadows a strong possibility for a crummy 2009.
The question is, how bad can it really be?
From yesterday’s MarketWatch:
Last month, the Dow lost 775.53 points, or 8.8%, marking the blue-chip index’s worst January performance in both point and percentage terms in its 113-year history. The second worst January came in 1916 when the Dow fell 8.64%, and then went on to a full-year decline of 4.91%.
The first month of the year has accurately predicted the year’s direction 75% of the time in the history’s index, matching 84 out of 112 full years. The accuracy has increased in more recent decades, matching 26 years, or 87% of the time, for the last 30 years, according to Dow Jones Indexes.
Regardless of the bearish sentiment, these are just statistics. Every month is something different and for all we know the market could finish positive by 1% in 2009 and defy the odds. Take it for what it’s worth.
Stock chart of the Dow’s historic January sell off below.
See Also:
- 25 Essential Bear Market Stock Tips For All Investors
- Ranking the 10 Worst Recessions of the Last 80 Years
- Understanding Bear Market Price Swings Through History
Source:
Equities investors mostly sidelined as month begins
Kate Gibson
MarketWatch, Feb. 2, 2009
