Here’s some pretty good historical data via Raymond James and Market Montage on the odds of a deeper market decline:
“Some interesting data from Jeff Saut of Raymond James if you are a data hound like I am.
Since 1928 there have been 294 pullbacks of at least 5%. Ninety four of them have been moderate (>10%), 43 have been severe (>15%) and 25 have been bear markets (>20%).
So in a statistical sense once you hit the 5% threshold your chances of a 10%, 15%, and 20%+ drop are as follows:
10%: 32.0%
15%: 14.6%
20%+: 8.5%”
Normally I’d say it’s unwise to data mine market facts like this and extrapolate out, but 294 data points is pretty broad as far as these kinds of statistics go…..
Mr. Roche is the Founder and Chief Investment Officer of Discipline Funds.Discipline Funds is a low fee financial advisory firm with a focus on helping people be more disciplined with their finances.
He is also the author of Pragmatic Capitalism: What Every Investor Needs to Understand About Money and Finance, Understanding the Modern Monetary System and Understanding Modern Portfolio Construction.
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