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Perspective on the Q3 Market Decline

October 22, 2015 By: Todd Schanel, CFA, CPA, CFP®

The quarter three numbers are in, and the S&P 500 index finished down just over 6%, while non-US markets finished down more than 10%. The end of August was particularly bumpy, when amidst of headlines of a Chinese stock market crash, looming Fed rate hikes, and fears of an earnings slowdown in the U.S. the S&P 500 Index abruptly declined 11% over the course of just seven trading days.

But have we seen this before in recent memory?

Since the beginning of 2010, there have been five occurrences where the market declined by 5% or more.

  • May and June 2010: US stocks down almost 8% in May and 5.6% in June, for a total two month decline of 13.5%. In those months we saw the May 6 “flash crash”, European debt problems, worries about a slowdown in Asia, and a decline in U.S. consumer confidence.
  • August 2010: US stocks down 4.5%, over continuing concerns about Europe, and a potential slowdown in the U.S.
  • May 2011 through September 2011: US stocks down more than 18% over five month period due to debt ceiling crisis, a U.S. credit downgrade, continuing fears over the European debt problems and worries about a global slowdown.
  • May 2012: US stocks down about 6% due to continued fears of a slowing U.S. economy, and jitters over the seemingly never ending European debt crisis.
  • May – August 2015: US stocks decline 12% over concerns in China, Europe, emerging markets, and a possible economic slowdown.
 And during that same time period, Apple launched more than 60 new products, Google developed a prototype for a driverless car, Uber and Air BNB became multi-billion dollar companies, dividends paid out by S&P 500 companies grew by 97%, and the US stock market doubled in value.

Core Wealth Management is a fee-only wealth management firm located in Jupiter, FL. Our CFP® professionals provide investment management, financial planning and advisory services, while always strictly abiding by the highest fiduciary standards. For more information, contact us today at 561-491-0231.

Core Wealth Management is a fee-only wealth management firm located in Jupiter, FL.  Our CFP® professionals provide investment management, financial planning and advisory services, while always strictly abiding by the highest fiduciary standards.  For more information, contact us today at 561-491-0231.

Todd Schanel, CFP®, CPA, CFA is the Principal and Director of Investment Advisory Services at Core Wealth Management.

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