I would rather look on what statistically the markets have done through the ages albeit some dour periods in between.
So what did happen? Well here are the facts:
1. May 1946, the Dow was at 213. The market fell 23.9% for 38 months until hitting a low point of 162. And ten months later, the market fully recovered.
2. April 1956, the Dow was at 521. The market fell 19.4% for 19 months until hitting a low point of 420. And ten months later, the market fully recovered.
3. January 1960, the Dow was at 521. The market fell 17.4% for ten months until hitting a low point of 566. And seven months later, the market fully recovered.
4. December 1961, the Dow was at 735. The market fell 27.1% for seven months until hitting a low point of 536. And fourteen months later, the market fully recovered.
5. February 1966, the Dow was at 995. The market fell 22.2% for eight months until hitting a low point of 774. And 25 months later, the market fully recovered.
6. April 1968, the Dow was at 985. The market fell 22.2% for 18 months until hitting a low point of 744. And 30 months later, the market fully recovered.
7. January 1973, the Dow was at 1,067. The market fell 46.3% for 21 months until hitting a low point of 573. And 118 months later, the market fully recovered.
8. September 1976, the Dow was at 1,026. The market fell 28.9% for 42 months until hitting a low point of 729. And thirteen months later, the market fully recovered.
9. April 1981, the Dow was at 1,030. The market fell 25.3% for sixteen months until hitting a low point of 769. And two months later, the market fully recovered.
10. August 1987, the Dow was at 2,746. The market fell 36.9% for four months until hitting a low point of 1,733. And twenty months later, the market fully recovered.
11. July 1990, the Dow was at 3,024. The market fell 22.5% for three months until hitting a low point of 2,344. And nine months later, the market fully recovered.
12. May 1998, the Dow was at 9,311. The market fell 20.8% for five months until hitting a low point of 7,379. And two months later, the market fully recovered.
13. January 2000, the Dow was at 11,908. The market fell 39.7% for 32 months until hitting a low point of 7,181. And 50 months later, the market fully recovered.
see further discussion on this topic here:
http://forums.marketocracy.com/general/posts/list/78354.page
Anyway, I count on it and make my decisions and strategy based upon a long term perspective.
