In a previous article a comparison was made to two previous times and economic periods in which the stock market crashed and then rallied back in a such big way just like it just has during the last two years. One of these times was the 1929 crash and subsequent depression.
I thought it would be interesting to drill down some more and show a chart with the 29 crash and aftermath along with the current stock market after the 2008 crash.
After viewing these charts there is no need for more commentary. They are remarkably similar up to the point where we are at now. While the current trend is still up the ride has gotten much more bumpy and volatility has grown. The trading environment is much more dicey. Whether it's the volatility, high frequency trading, the European debt crisis, our US debt, the mortgage/housing crisis, Japans natural disaster, the end of QE2, unemployment, unrest in the MENA countries, war in Afghanistan, ...well enough already ... the fact is that there are many slippery spots on that wall of worry the stock market has been climbing.
With the higher volatility the market has reached a prudent person should take a note from the 2000 and 2008 stock market crashes and consider if they really want to remain in the buy and hold crowd, but instead take a more active stance in looking in on their investments.
Trade with a plan.
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