Three years ago today investors saw the Dow fall 1,000 points for the first time ever. Although it didn’t close down 1,000 points, it was still a historic day for the market. Sparking the meltdown was worries over the Chinese currency markets and Chinese economy.
On a percentage basis, the Dow was down 6.62% at the lows of that historic day. The largest intraday percentage drop ever for the Dow was 25.33% on October 19, 1987. In fact, since 1987, there have been five instances where the Dow was down at least 9% at its intraday lows. Three of those times were during October 1987, one was in October 2008, and the other was the Flash Crash in May 2010.
“Yes, on a percentage basis the 1,000 point decline three years ago wasn’t one of the largest drops ever, but a 6.62% slide shouldn’t be ignored. It was still a harsh reminder that volatility is part of the game and investors should never get too complacent,” said LPL Senior Market Strategist Ryan Detrick.
Below is a chart that puts into perspective just how much a 1,000 point drop would impact the Dow on a percentage basis. In the early 1980s, it would have wiped it out. Today it would amount to a 3.9% drop.
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