For all the Sturm und Drang that surrounds bear markets (and for that matter, even the slightest whiff of them), sharp
downturns in stock prices aren't all that unusual.
Not exact matches
A cyclical
downturn, a sharp decline
in stock prices, or an unexpectedly steep increase
in real interest rates dictated by skeptical overseas investors might be the catalyst that prompts legislators to get serious.
European equities failed to end trade on a positive note, as market sentiment was hit by a
downturn in commodity
stocks and
prices.
If the airlines show they can withstand the next
downturn, Miller says, it could «lead to a significant re-rating»
in which investors
price airline
stocks more like industrial
stocks —
in other words, at twice the
price where they currently trade.
Analysts at Calgary - based AltaCorp Capital Inc. said
in a report published Monday that poor pipeline access has hurt Canadian energy companies to the extent that their
stock prices have underperformed U.S. companies since the
downturn of 2008 - 09.
Many grocers saw dramatic drops
in stock prices; Kroger Co.'s shares fell 32 % despite posting positive results during the
downturn.
More active investors might also want to consider having a cash reserve, and creating a watch list of
stocks to consider buying at certain
price points, to prepare for buying
stocks in the event of a
downturn.
One school of thought is this: If you have
stocks that aren't overvalued when you buy them,
downturns in their value give you an opportunity to purchase more
stock at a cheaper
price.
In July, TRW's price was more than twice that of Bristol, but when concerns grew about a cyclical downturn in Europe, TRW stock fell sharpl
In July, TRW's
price was more than twice that of Bristol, but when concerns grew about a cyclical
downturn in Europe, TRW stock fell sharpl
in Europe, TRW
stock fell sharply.
At present, investors have no reasonable incentive at all to «lock
in» the prospective returns implied by current
prices of
stocks or long - term bonds (though we suspect that 10 - year Treasuries may benefit over a short horizon due to continued economic risks and still - unresolved debt concerns
in Europe, which has already entered an economic
downturn).
Doomsayers have pointed to any number of reasons
in recent years why they believed the market was headed for a
downturn: Standard & Poor's downgrading of U.S. Treasury debt
in 2011; the growth - slowdown scare
in China that sent
stock prices down 12 %
in the summer of 2015; Brexit and the election of Donald Trump, both of which were supposed to be catalysts for a market rout.
If you're invested
in the
stock market and
prices drop, you can use momentum to sell out and protect your portfolio
in case the economy takes a
downturn.
When the
price / earnings ratio has approached 20,
stocks have typically returned less than Treasury bills for as much as a decade or more.While it is not possible to avoid every
downturn in the market, it is essential to defend capital when the Market Climate suggests a poor tradeoff of expected return to risk.
Those who'd bought
stocks before the bubble inflated
prices, and held them through the
downturn, probably wound up ok
in the long term.
The
stock appears reasonably
priced today, although a protracted
downturn in commodity
prices could continue to pressure near - term earnings.
Or, to put it another way, it would be a huge mistake to stay 100 %
in stocks on the theory that «you can handle it» only to find that the reality of owning an all - equity portfolio during a market meltdown like the 50 % - plus
downturn from late 2007 to early 2009 is more financially and emotionally unsettling than it seemed when
stock prices were at or near a peak.
By contrast,
in the wake of a market crash investors become overly cautious and often dump
stocks and huddle
in bonds and cash, even though
stocks are usually more attractively
priced after big
downturns.
Stock prices took a sudden
downturn in early February, with the S&P 500 erasing all the gains for the year, and then some.
Its value is typically inversely correlated to the rest of the market as a whole, because its status as a material, durable store of value makes it a preferred «safe haven» to move money into
in times of economic
downturn, when
stock prices, bond yields and similar investments are losing value.
Markets that were expected to fully recover from the
downturn have experienced issues with their class - A
stock, such as the drop
in oil
prices in Houston and the slump
in demand
in the Washington, D.C. region.