Stocks Fall For Fifth Consecutive Month

Last Updated Sep 30, 2011 5:26 PM EDT

Stocks declined 7.75% in September, making it the fifth consecutive month of declines as the European crisis and the global economy weighs on investors. Stocks have declined in each of the past five months by progressively increasing amounts. For the quarter, stocks gave up 15.16 percent. All of these measures are using the total return of the Wilshire 5000, the broadest measure of US stocks.

Not yet a bear
As April closed, stocks were within 1.8 percent of the all time high on October 9, 2007. Since then we have approached bear territory, which is generally considered to be a decline of 20 percent. Stocks are currently down 16.63 percent from that 2011 bull high. This compares to the 17.6 percent plunge markets had in October 2008 alone.

Perspective
While stocks are down, it's important to see where we are versus our recent past. Today the stock market is 19.1 percent below the pre-real estate and financial crash all time high in 2007, and 80.6 percent higher than the bottom reached on March 9, 2009.

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    Allan S. Roth is the founder of Wealth Logic, an hourly based financial planning and investment advisory firm that advises clients with portfolios ranging from $10,000 to over $50 million. The author of How a Second Grader Beats Wall Street, Roth teaches investments and behavioral finance at the University of Denver and is a frequent speaker. He is required by law to note that his columns are not meant as specific investment advice, since any advice of that sort would need to take into account such things as each reader's willingness and need to take risk. His columns will specifically avoid the foolishness of predicting the next hot stock or what the stock market will do next month.

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