Market declines — A little history
Stock market declines are a natural part of investing, but they’re also the last things most investors want to experience. Here is some historical background to help you put market declines in perspective.
Types and frequency of stock market declines
Declines have varied widely in intensity, length and frequency. While in the midst of one, it’s been nearly impossible to tell if you’re seeing a slight dip in the market or the beginning of a more prolonged correction.
The table below shows how frequently declines in the Dow Jones Industrial Average have occurred since 1900. As you can see, while declines have varied widely in intensity, length and frequency, they have also been somewhat regular events.
A history of declines
(1900 – December 2013)
|Type of decline||Average frequency1||Average length2||Last occurrence||Previous occurrence|
|-5% or more||About 3 times a year||47 days||October 2013||August 2013|
|-10% or more||About once a year||115 days||October 2011||July 2010|
|-15% or more||About once every 2 years||216 days||October 2011||March 2009|
|-20% or more||About once every 3-1/2 years||338 days||March 2009||October 2002|
Source: The unmanaged Dow Jones Industrial Average
- Assumes 50% recovery of lost value
- Measures market high to market low
Past results are not predictive of results in future periods.
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Investors should carefully consider investment objectives, risks, charges and expenses. This and other important information is contained in the fund prospectuses and summary prospectuses, which can be obtained from a financial professional or downloaded and should be read carefully before investing.