We witnessed an extraordinary move in the financial markets on Monday, March 9.
The Dow Industrials lost over 2,000 points, as Coronavirus fears continued to worry investors. At the same time, oil prices lost nearly 25 percent, on news that Saudi Arabia was dropping crude oil prices and raising production as well. Meanwhile, the 10-year Treasury bond yield touched an all-time low of 0.318 percent during the trading session, as unnerved investors looked for some stability.[i]
In times like this, I frequently hear that some find it difficult to stay committed to an investment program when fear has gripped the financial markets.
But for me, a quick look at recent history helps me keep these events in perspective.
Remember when the trade dispute with China ramped up back in February 2018? In just six trading days, stock prices had undergone a rollercoaster ride on their way to a 10-percent market correction. On February 8, 2018, CNBC reported that the Dow Industrials traveled 22,000-plus points over the course of February’s first full week of trading, due to trade-related fears.[ii]
How about the 4th quarter of 2018? On October 10 of that year, the Dow saw an 800-point drop, largely due to rising interest rates and global economic concerns. And who can forget the holiday market trading two months later? It was a breathtaking event as the Dow lost over 600 points on Christmas Eve, then soared 1,000 points the day after Christmas.[iii],[iv]
In the past few weeks, I’ll admit that I’ve done a few “double takes” at my computer screen, as we’ve watched major swings in stock prices and movements in the bond and crude oil markets.
[i] CNBC.com, March 9, 2020
[ii] CNBC.com, February 8, 2018
[iii] CNBC.com, October 10, 2018
[iv] CNBC.com, December 25, 2018