Market declines — A little history | American Funds

Market perspective

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)

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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