Friday, September 9, 2016

The Volatile Time of Year

I was just researching this morning when the largest point drops have occurred in the Dow Jones and S&P 500.  Then of course this morning we get news that North Korea detonated a nuclear bomb, and the Fed is really thinking hard about a rate hike. While the current 1.4% drop is well, a drop in the bucket. You never know when the day can turn into a historic loser, or winner for that matter.

Anyway for the Dow Jones and S&P 500 you can see that 70% of the largest losses have come in October, November, and December. Further research shows the end of August through September is also riddled with notable declines.

The largest decline for the Dow came during the 1987 crash at -22% followed by the crash before the Great Depression at -12%. The S&P 500 shares it's largest single daily loss with the Dow at -20% in 1987, but number two is the 2008 Great Recession crash at -9%.

Dow Jones
RankDateCloseNet change% Change
11987-10-191,738.74−508.00−22.61
21929-10-28260.64−38.33−12.82
31899-12-1858.27−7.94−11.99
41929-10-29230.07−30.57−11.73
51929-11-06232.13−25.55−9.92
61932-08-1263.11−5.79−8.40
71907-03-1476.23−6.89−8.29
81987-10-261,793.93−156.83−8.04
92008-10-158,577.91−733.08−7.87
101933-07-2188.71−7.55−7.8

S&P 500
RankDateCloseNet Change% Change
11987-10-19224.84-57.86-20.47
22008-10-15907.84-90.17-9.03
32008-12-01816.21-80.03-8.93
42008-09-291,106.42-106.85-8.81
51987-10-26227.67-20.55-8.28
62008-10-09909.92-75.02-7.62
71997-10-27876.99-64.65-6.87
81998-08-31957.28-69.86-6.8
91988-01-08243.4-17.67-6.77
102008-11-20752.44-54.14-6.71

For the most part the largest daily price gains are also found in the same months . Usually when the market is that volatile you see massive swings in both directions.  The Dow's two best days came in
1933 & 1931 with a 15% & 14% gain respectively. The S&P finds both of it's best days in October 2008 with a 11.5% & and 10.79% gain respectively.

Dow Jones
RankDateCloseNet change% Change
11933-03-1562.18.2615.34
21931-10-0699.3412.8614.87
31929-10-30258.4728.412.34
41932-09-2175.167.6711.36
52008-10-139,387.61936.4211.08
62008-10-289,065.12889.3510.88
71987-10-212,027.85186.8410.15
81932-08-0358.225.069.52
91932-02-1178.66.89.47
101929-11-14217.2818.599.36

S&P 500
RankDateCloseNet Change% Change
12008-10-131,003.35104.1311.58
22008-10-28940.5191.5910.79
31987-10-21258.3821.559.1
42009-03-23822.9254.387.08
52008-11-13911.2958.996.92
62008-11-24851.8151.786.47
72009-03-10719.643.076.37
82008-11-21800.0347.596.32
92002-07-24843.4345.735.73
102008-09-301,113.7859.945.42

If you look a little closer you'll see the Dow has the majority of it's biggest moves between 1929-1933. The S&P's on the other hand are all more recent with the majority in 2008. That might have something to do with the index being very young since it only started tracking stocks in 1923 with about 90 in the index by 1926.

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