Focus Point - The Safe MarketCommentary by Pete du Pont
April 03, 2001
I'm Pete du Pont with the National Center for Policy Analysis. A lot of stock market newcomers are panicking because of the market dip.
They see the end of the their savings -- and of the world as they know it.
But business writer Scott Burns recently reported research by Ibbotson Associates showing this is the world as we know it - a world where there's a 96.7 percent chance the market will improve. That's because 96.7 percent of the time, stocks have done better than they're doing now.
Ibbotson considered the 888 12-month investment periods since march 1927. Stocks have shown positive returns in 75 percent of all of them. But only 30 periods were worse than the 12-month return for the S&P 500 ending March 22. And most of the worse periods were in the Great Depression.
Stocks did better 96.7 percent of the time than they did the last 12 months, and similar figures apply for other investment periods -- a month, a quarter, six months or two years.
So relax, and the market will rise again, just like it always has..
Those are my ideas, and at the NCPA we know ideas can change the world. I'm Pete du Pont. Next time, fighting for free speech.