The Stock Market's Worst Year

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Includes: DIA, QQQ, SPY
by: eChristian Investing

Most everyone is now aware that we are in the grips of one of the greatest market downturns in history. Seemingly everyday the market seems to plummet even farther, with little hope for that changing anytime soon. Most of us are too young to have experienced the Great Depression, and have lived our lives assuming we would never have to experience such a traumatic event. However, the stock market crash of 2008 is starting to rival that of 1930-31 that ushered in the Great Depression.

Dow Jones Industrial Average

After posting its fifth consecutive day of triple digit losses, the Dow Jones Industrial average is now down 30.2% for the year. That qualifies it as the 7th worse performance on record. Going back to 1896, there have only been 6 other years where the Dow dropped more than 30%.

  • 1931: -52.67%
  • 1907: -37.73%
  • 1930: -33.77%
  • 1920: -32.90%
  • 1937: -32.82%
  • 1914: -30.72%
  • 2008: -30.21%

The scary part is that this year has the potential to at least move into 2nd place and an outside chance of even becoming the worse performing year ever.

Nasdaq Composite Index

The Nasdaq is the newest of the major market indexes having only started in 1971. No doubt it will eternally be linked to the infamous technology bubble of the late 1990’s. The ensuing crash saw the Nasdaq fall from over 4,000 at the end of 1999 to only 1,335 at the end of 2002.

In 2000, the Nasdaq fell a whopping 39.3%. However, as of the close of the markets today, the Nasdaq is down 34.4%. That qualifies it as the 3rd worse performing year in the Nasdaq’s history. It’s simply a matter of another bad day or two before 2008 takes its place in history as the worse ever.

  • 2000: -39.29%
  • 1974: -35.11%
  • 2008: -34.38%

S&P 500 Index

The S&P 500 is widely regarded as perhaps the best indicator of the broader market. It includes volatile "growth" stocks and the less volatile "value" stocks; it also includes stocks from both the NASDAQ and the NYSE.

The S&P 500 Index was created in 1957, and over those 57 years it has posted 37 years of gains against 14 years of losses. However, never has the S&P 500 index experienced a drop as severe as we are currently experiencing. As of the market close today, the index is down 32.9% for the year. That would rank it as the worst year ever in the history of the S&P 500 index – far surpassing even the huge declines of 1973-1974 and 2002.  

  • 2008: -32.92%
  • 1974: -29.72%
  • 2002: -23.37%
  • 1973: -17.37%

As depressing as it may be to realize that we are currently experiencing the biggest market downturn in recent history, many market experts expect it to continue to get worse.

Making history isn’t always fun….

Disclosure: At the time this article was published, the author did not have a financial position in any of the stocks mentioned in this article.