Here is a long term picture of the S&P500 since the close on 9/10/2001 when the S&P closed at 110.05.
We all remember the stock market was closed for a week and then re-opened on 9/18/2015 in a miraculous effort of humanity to restore power and order in one week from the terrorist attacks on New York City.
From what you can see on this chart, the market did grind down under 80 three times over the next year and a half for a 30%+ drop, but then nearly doubled from those lows before running into the deleveraging cycle that started in 2007 and led to a 56% drop in the market averages as banks scrambled to cut assets from their balance sheets.
It took a full 10 years of going sideways into 2011 to finally put the 110 level in the rear-view mirror.
There has been tremendous volatility since 2001 that investors have had to absorb AND at the same time you can see the LONG STRETCHES where investors were not tested at all with periods of losses. More than 8 years in the last 12 we have seen a very stable stock market where losses over 6 months were minimal (<6%). This is extremely unusual in the history of the market averages.
Does the current 10% drop over the last 6 months mean anything? Historically, it has presaged the 2001-2003 bear market of 50% and the 2007-2009 bear market of 56%, so that's why the point is so interesting, but there are other times a 10% drop over 6 months was a good time to buy. Anything so simple is bound to work some of the time.
Patterns are always interesting to me and trying to find valuable patterns is what I am all about and what TradingView is all about too.
The S&P500 is a decent long term investment, and even though investors haven't been rewarded handsomely for the risks that they are taking and have taken, it is good to see what the historical returns have been so you can both teach yourselves and then teach your children how to invest for their future. The past does not equal the future, but we need to learn and understand how to make good decisions and take sound risks.
Wishing you great success in your investing lifetime.
Tim West
9/11/2015 9:51AM EST
Comments
MarcoEspirulina
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Thank you for your friendly sharing, Tim ! Have a great weekend !
timwest
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You are welcome Marco! I hope you find some patterns to share with all of us too. Have a great weekend!
sandeep9598
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Thank you Tim!! where do you see market heading now? will it make new highs with all this bad reports coming out for the quarter. bad earning (few sectors), weak employment, China trouble, etc... hack even FED cant raise the rates to .01% which confirms that we are running on weak economy? please share your view. :)
timwest
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I'm always here thinking and working on providing entries and exits for the markets at the KEY HIDDEN LEVELS CHAT ROOM. I see the market going sideways to down for 2016 and 2017 as we work out the challenges of valuation, deflation, demographic demand weakness, and world-wide tension. The US Presidential election is also a major sign of weakness and doubt for investors in equities.
Killy_Mel
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who knows maybe 110 will be back - all in all recessions in US happen regularly. What is more interesting - 11 years is the maximum gap between them.. so how about 2018-2019))
also what could drive it down? maybe a boom in peer-to-peer lending securitization business?