The stock market hit its lowest point in recent memory one year ago during the first week of March. Now, one year later, how have things improved, or have they improved at all? What is the market like now after some recovery over the past year? Is it ready for nervous investors again? These are the questions that everyone is asking. Some people have started to get back into the market but a big portion of us are still watching from the bay as our dear savings are too dear to us!
Stock Market bottomed in March 2009
It was one year ago during the first week of March that the stock market fell to its lowest levels seen in recent memory. It was specifically on March 9, 2009, that the stock market and the investors using it, suffered through one of the worst days for the stock market. But honestly speaking back then, no one knew if it was the absolute bottom or not. It could very well have gone lower! So the best course of action at that point was to pull your money out and thats what average americans did including me.
Market Recovery in 2010
So, it is one year later, how have things changed? Are things better? Well, the answer to this seems to be yes and no. While the market has improved by 55 percent, making it one of the best and fastest improvements since The Great Depression, there are still some issues that worry investors.
Investors are still suspecting a second dip
Currently, 26 banks have failed and that means this year is on pace to match the 140 bank failures that occurred last year. On the FDIC list of problem banks that may fail, there are 702 banks, including 252 that were on the list at the start of 2009. The main reason for this is because foreclosures have continued to be a problem for many homeowners and that puts added financial strain on many banks.
In regards to the recovery of stocks, there are several that have seen their values increase by leaps and bounds since last year. Genworth Financial and Office Depot have both increased by over 1,000 percent, while Ford has seen its stock price grow by 660 percent. Overall, the sectors that are doing the best over the past year on the stock market are following:
- Insurance
- Retail
- Financial services
- Lodging
- Automotive industries
Of course, there are still plenty of stocks that have lost a great deal of value, but today there are more doing better than doing poorly. For example, on the S&P 500, over half of the stocks listed have experienced over 100 percent in growth since this same time last year. This shows that the market is recovering, but that there are still problems. This month could be seen as the balance between the bad years of 2009-09 and the good years of 2010-11. As time goes on, we should begin moving more and more into better market conditions, and away from the bear market of 2008-09.
Overall what is the sentiment
Overall how is the market doing now? Well, it is doing better and a big part of that is the fact that many investors are now feeling more confident in the market, much more than last year. Last year it was believed that a bear market would continue for a long period of time, but things have now changed and it seems as though the market is turning a corner. Many investors are now going into riskier investments and that shows a confidence in the market. At the same time people are much more cautious than ever before. Even if they see a rally, a common sentiment is to pull early on to lock in decent profit rather than aiming for big bucks. On that note, I locked in around 14% profit just yesterday using TEAR & SGMA!! WOOT WOOT
