Dow Jones reached 6-year low, stock market crisis continues
Today Dow Jones Industrial Average closed at 7,552.29 points. It is around the lowest level in more than 10 years, which was achieved 6 years ago in 2002 (it was around 7,500 points).
In 2002 we had a beginning of the 5-year bull market. The top was reached in 2007 at around 14,000 points. It means that in 5 years US stocks gained over 86%. It’s funny that all this 5-year profit diminished in just 1 year. Last 12 months were enough to come back to the bottom.
This situation shows exactly how the crisis works. Good times last long and are misleading. Crisis is sudden and quick and anihilates all we accumulated in the “happy years”. One can think that in last 6 years the economy didn’t move forward. BUT, the truth is, the economy HAS moved forward. Stock exchange index does not reflects exactly what happens in the real world. Stock market is mainly driven by psychology and always exaggerates. Investors exaggerated in optimism in last 5 years, now they must overreact and exaggerate in pesimism. That’s all. The crisis is what we have now but we WILL be back to normal. Just have to survive upcoming year or two. This may be hard but these are normal economic rights.
Tags: dow jones, Stock Market
Stock Market | admin | 
November 20, 2008 11:38 pm
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By Den, November 24, 2008 @ 8:46 am
Market Review: Citigroup has lost two-thirds of its value over the week: http://nofinancialcrisis.com/content/view/72/1/