Markets' fall in 2008 was worst in seven decades
— -- Investors can't close the book on 2008 fast enough, and it will be some time before they can look back and laugh it off.
After delivering investors a brutal 38.5% loss, 2008 stands as the worst year for the Standard & Poor's 500 since 1937. The 33.8% drop in the Dow Jones industrials was the worst since 1931. That easily makes 2008 the nastiest annual decline ever experienced by most current investors.
"2008? Good riddance," says David Sowerby of Loomis Sayles. "It's been like a bad date. 'Don't ever call me again.' "
There is no shortage of ways to quantify the destruction. The carnage has been nothing short of breathtaking, in that it has been:
•Unrelenting in its persistence. The Nasdaq composite index fell 40.5%, making it the worst of the three major U.S. indexes, all of which were underwater from 2007 levels for all 253 trading days. It was the S&P's third worst year, the second worst for the Dow and the worst ever for the Nasdaq.
•Broad and biting. A vast majority, 1,316 or nearly 9 out of 10 stocks in the S&P 1500, lost value in 2008, according to data from S&P's Capital IQ. And on average, the losers are off 42.3%. Meanwhile, 469 members of the S&P 500 fell last year.
•Jarring volatility. The market posted its best percentage day, on Oct. 13, as well as five of its worst, based on the DJ Wilshire 5000 index, which is one of the broadest measures of the U.S. market. And $6.9 trillion in market value was wiped out.
•Disrespecting of even relatively safe havens. Even investors who did what they were supposed to, diversify across different types of stocks and geographies, weren't spared. Shares of large companies with value-priced stocks, generally considered a safer part of the market, lost 38% of their value as measured by the Vanguard Value exchange traded fund. European and Asian stocks did even worse, with the Vanguard Europe Pacific ETF falling 43%. Every major stock market in the world declined, Capital IQ says. "The basic tenets of diversifying a portfolio didn't work this year," says Howard Yata of Wilshire Associates.
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