Citation :
The historical stddev of the Global market is ~15%. Assuming a gaussian distribution:
15-20% : occurs ~33% of the time. We get these 1 out of every 3 years, on average. Terms: correction, bear market.
30-35% : occurs ~10% of the time. We get these 1 out of every 10 years on average. Terms: recession, crash.
45%-50%: occurs ~1% of the time. We get these 1 out of every 100 years on average. Terms: great depression, great recession.
An equity investor will see many corrections/bear markets throughout their investing lifetime.
An equity investor will see a handful of recessions/crashes throughout their investing lifetime.
An equity investor may see one (or none!) great depression/recession in their investing lifetime.
Anything beyond -50% is a 4sigma event, and is probably outside of normal planning scenarios for an average investor.
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