6 Years of Market Gains Are Lost in 2008

Diversification — the idea that it is unwise to put all your eggs in one basket — did not pay off for investors in 2008, casting doubt over this cornerstone of modern investing. The American market was far from the worst hit in 2008. Stocks have fallen 55 percent to 72 percent in Brazil, Russia, India and China — the so-called BRIC economies that were darlings of the late, great boom. Stocks in developed European and Asian markets also fell sharply, though less than their emerging counterparts. Many commodities like oil and copper crashed. - NYT

clipped from www.nytimes.com There was almost no place to hide from the crash of 2008. By the time the New York Stock Exchange closed Wednesday to end the year, virtually anyone with money in stocks had felt the punishing drop in the market. The Dow Jones industrial average ended the year down more than 33 percent, the worst year for the index since 1931, and the broader Standard & Poor’s 500-stock index more than 38 percent. Blue-chips like Bank of America, Citigroup and Alcoa lost more than 60 percent of their value. All told, about $7 trillion of shareholders’ wealth — the gains of the last six years — will be wiped out in a year marked by violent market swings. All but 2 of the 30 Dow industrials, Wal-Mart and McDonalds, fell by more than 10 percent. Almost no industry was spared as the crisis that emerged in the subprime mortgage market metastasized and the economy sank into what could be a long, gray recession.