Giving October Market, ETF Performance Perspective

November 30, 2008 at 1:00 am by Tom Lydon      Bookmark and Share

ETFsSometimes, when the bad news keeps on coming, exchange traded fund (ETF) investors just need a bit of perspective.

In October, hardly a day went by when media headlines didn’t shout about another down day on Wall Street, says Intelligent Speculator. But was it really so bad? A little bit of perspective on the month may be all you need to feel a little better about the market turmoil.

When comparing the biggest intra-month losses, with the high close to low close, the difference in October was down 26.88%, with 26 trading days total. October 1929 was off 33.69%, and October 1987 was down 31.47%. In fact, the numbers presented that this October was actually the fourth largest intra-month loss. The only other months with bigger losses were October 1929, October 1987 and September 1931.

October was a truly remarkable month when you take history into consideration.

The lesson is to take these market swings in stride. It is almost impossible to decide when an entry point into the market will present itself, so taking a position is hard, even for most investment professionals. Be sure to keep an eye on the trends and have a strategy when the opportunity presents itself.

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