I started to write this chapter for the first edition of this book on Monday, October 6, 2008. Around noon on that day the S&P/TSX Composite Index had dropped over 1,000 points since the market opened. That was a decline of over 11% in a few hours. By the end of the day the decline had been reduced to 572 points. They say the stock market is volatile, but this is ridiculous. What’s worse is that this day had come after already jaw-dropping declines since the index peaked in June of 2008.
In this second edition, I am writing on Wednesday, July 30, 2014. We now have complete information about one of the worst stock market crashes in history, and how the recovery has gone.
Let’s start with the bad news.
Check out the chart in Table 2.1 that shows the weekly closing values of the S&P TSX Composite Index from the highest peak it had reached on June 18, 2008 to March 9, 2009.
Table 2.1 S&P TSX Composite Index
|Date||Close||Change Since Prior Week||% Change Since Prior Week||% Change Since Peak|