Question

Describe the bear market of 2008 through early 2009 and the trend of stock prices in subsequent years.

Answer 1

Ans:

The bear market of 2008 through early 2009 was reason of housing finance bubble, less revenue generation in automobile sector, and debt bubble.

During this recession the S&P 500 lost almost 50% of its value, but due to strong intervention of Government and federal reserve bank the duration of bear market was just below the average.

The bear market commenced and showed its action in the june 2008 and resulting Down Jones industrial Average decreased 20% from its record high in the month of october 2017. This decline of DJIA of 20% posed impact on other exchanges across globe.

This bear market was a length of 17 month since October 9, 2007 to March 9, 2009.

The DJIA Down Jones Industrial Average index trend view:

Year               Annual closing price                         percentage change%

2008                  11,244.06                                         6.43%

2009                 8885.65                                            - 33.84%

2010                   10,668.58                                          18.82%

S&P 500 Trend view in bear market situation:

Year               Annual closing price                      Percentage change %

2007    1477.18 3.53%

2008 1220.04    - 38.49%

2009    948.05 23.45%