The market had a huge day today with the Dow rising 936 points! Following the biggest rise in the markets history I thought I would post a few figures from Friday for all the people who pulled thier money out the market last week in a panic and who most likely are questioning the move after today.
As of Friday’s closing bell the US martkets were down ~ 18%, EU markets ~ 25% and the Asian markets ~ 30%. While an 18% slump sucks is it enough to make me panic? Well let’s look at a few additional indicators today vs. the "Depression"
| Today | "Depression" | |
| Industrial Production
|
Down ~ 1% | Down ~ 44% |
| Unemployment | ~6% | ~ 25% |
| Housing payments in the rears | ~ 4% | ~ 40% |
The market conditions today are a long way from the conditions in 1929. Things look much closer to the market crash of 1973/74 where the Dow lost ~ 45% of its value.
Now let’s look at an investmetment made in 1972 and present day value. This would be representative of a thirty somethings investment today with a retirement target cashout.
I looked at an investment in XOM made 01/70 and sold today, even following last week the gain is ~ +843%. The Dow inthe same time perios is ~ +1060%.
I also looked at the past 10 years from Oct 1998 til today which shows a ~ +107% for XOM and ~ +19% for the Dow.
Conclusion, the market is not a place to put your cash if you need liquidity. As a long term investment the market is the place to be!