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Monday, March 23, 2020

Putting Market Downturns In Perspective

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In my opinion, we are witnessing the most challenging market environment since the 2008 financial crisis, and I wanted to provide some perspective as it relates to the long-term impact of significant market events like the one we are currently experiencing. According to Columbia Threadneedle, reflecting on 19 similar crisis events since 1929, the average decline in the Dow Jones Industrial Average was -10.6% (we were at -28.0% as of March 17). However, the average returns over the ensuing one, three, six and 12 months were +3.8%, + 6.3%, +10.8% and +15.4%. According to CNBC, there have been 26 “market corrections” since WWII with the average decline of -13.7% and recoveries taking on average four months. While the speed of this latest decline has surprised many, global economics remain positive, and the evidence suggests that this, too, shall pass.

The Dow Jones Industrial Average is a price-weighted average of 30 blue-chip stocks that are generally the leaders in their industry. An investment cannot be made directly in a market index.

Denis Poljak is a senior vice president and wealth advisor at Morgan Stanley Wealth Management. He is a portfolio management director and founding member of the Poljak Group at Morgan Stanley in Shreveport. Denis has a Ph.D. in economics from the University of Sarajevo, an M.B.A. from Louisiana Tech University, and a bachelor’s degree in accounting from Centenary College of Louisiana. He has earned the following designations: Certified Portfolio Manager (CPM®) from Columbia University in New York, Certified Investment Management AnalystSM (CIMA®) from the University of Pennsylvania’s Wharton School of Business, and is a Certified Financial Planner (CFP®). Denis has over 24 years of industry experience and can be reached by phone at (318) 677- 5426 or by email at denis.poljak@morganstanley.com

Denis Poljak is a financial advisor with the Wealth Management Division of Morgan Stanley in Shreveport.

The information contained in this article is not a solicitation to purchase or sell investments. Any information presented is general in nature and not intended to provide individually tailored investment advice. The strategies and/or investments referenced may not be suitable for all investors as the appropriateness of a particular investment or strategy will depend on an investor’s individual circumstances and objectives.

Investing involves risks and there is always the potential of losing money when you invest. The views expressed herein are those of the author and may not necessarily reflect the views of Morgan Stanley Wealth Management, or its affiliates. Information contained herein has been obtained from sources considered to be reliable, but we do not guarantee their accuracy or completeness. Morgan Stanley Smith Barney, LLC, member SIPC.


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