Year of the Snake Stock Market Investors Should be Cautious in 2013
The Chinese New Year officially began February 10, 2013 — the year of the snake which some investors consider a very bad omen. Not only does the year of the snake have the worst stock market returns of all zodiac signs, but some of the darkest moments in U.S. history have come during that zodiac year.
Art Cashin, director of floor operations at UBS AG listed the year of the snake as one reason investors should be cautious about stocks, and there’s plenty of history to back up Cashin’s statement.
2001 – Economic Effects Arising From the September 11, 2001 World Trade Center Attacks
The attacks had a significant economic impact on United States and world markets. The stock exchanges did not open on September 11 and remained closed until September 17. Reopening, the Dow Jones Industrial Average (DJIA) fell 684 points, or 7.1%, to 8921, a record-setting one-day point decline. By the end of the week, the DJIA had fallen 1,369.7 points (14.3%), at the time its largest one-week point drop in history. In 2001 dollars, U.S. stocks lost $1.4 trillion in valuation for the week.
1989 – Friday the 13th Mini-Crash Refers to the Stock Market Crash That Occurred on Friday October 13, 1989
Moments after the UAL deal fell through, the indices began their plunge. By the time the closing bell rang, the Dow Jones Industrial Average was down 190.58 points, or 6.91 percent, to 2,569.26. The NASDAQ Composite shed 14.90 points, or 3.09 percent, to 467.30, and the S&P 500 Index fell 21.74 points, or 6.12 percent, to 333.65. The Dow Jones Transportation Average fell 78.05 (5.26%) on the 13th, and fell another 102.04 (7.26%) on the 16th for a total decline of 12.13%. The major indices had closed at all-time highs as recently as Monday, October 9.
1977 – The Peevish Summer of 1977
Early into 1977, as the economic recovery picked up momentum, some savvy Wall Street professionals were predicting that stock prices would zoom and the Dow Jones Industrial Average would easily soar beyond the peak of 1,051.70 it reached in 1973. So much for savvy — the stock market closed December 31, 1976 at 1004.96 and stock averages have wobbled and worried their way down steadily — the 1977 market’s peevishness turned into something approaching panic, as a selling stampede slashed share values and drove the Dow down to its lowest level in 18 months — closing November 2, 1977 at 800.85, down 204.11 points (20.3%) and finding a bottom of 742.12 on February 28, 1978, down 262.84 points during that period.
1965 – The Post WWII Bull Market Peaked in 1965
It took 17 years (1982) until the market permanently eclipsed the 1965 close.
1953 – The Recession of 1953
The Dow Jones Industrial Average closed January 2, 1953 at 292.14 and made a low of 255.49 on September 14, 1953 — a drop of 36.65 points, down 12.5% during that period.
1941 – Japan Attacked Pearl Harbor in December, Prompting the U.S. to Enter World War II
The Dow Jones Industrial Average closed December 6, 1941 at 116.60 and finally made a low of 92.92 on April 28, 1942 — a drop of 23.68 points, down 20.3% during that period.
1929 – The Stock Market Crashed in October, Beginning the Great Depression
The Great Depression followed; during that stock market crash, the market went down every year until it bottomed in 1932. It took about 25 years for the stock market to close the year above the 1928 close.
1917 – The United States Entered World War I in April
The Dow Jones Industrial Average closed January 2, 1917 at 96.15 and made a low of 65.95 on December 19, 1917 — a drop of 30.20 points, down 31.4% during that period.
1905 – Secular Bear Market, 1905 – 1921 (16 years)
The Dow was in a secular bear market from 1905 until 1921. As you can see, this secular bear market was typical of most secular bear markets, such as the one from 1966 – 1982, composed of mostly vicious cyclical bull and bear markets that result in a mostly sideways long term movement.