Worst Historical Annual Performances for the DJIA

2008 is certainly shaping up to be a horrendous year for the Dow Jones Industrial Average (DJIA). The credit markets have seized up, banks aren't lending to each other and consumers are starting to dramatically alter their spending habits. The Dow opened up 2008 at a lofty 13,264.82. As of October 7th, 2008, the average is trading at 9,447.11, an incredible 3817.71 points off of its 2008 starting point. The Dow has fallen 28.78% so far in 2008, and it seems as though there might be some more bloodshed to come.

Edit: As of December 9th, the Dow is now down 33.6% on the year.

Historically speaking, how does 2008 compare to some of the worst years previous to this one?

The fact is, you have to go way back in the history books to find a year that has been as terrible as 2008. 2002 was a bad year for the Dow Jones Industrial Average - the stock markets were still reeling from 9/11 and the recession that this event caused. However, the Average only dropped 16.76% that year. That was a terrible year, and it was still only about half as bad as 2008.

The Dow Jones Industrial Average didn't post one decline from 1991 to 1999. In 1990 the index posted a drop of 4.34%.

You might be thinking to yourself - well what about 1987? The Dow Jones Industrial Average crashed over 20% in one day, so surely that was a horrible year for the markets? Actually, the DJIA posted a small gain of 2.26% that year.

You need to head into the 70's and beyond to find any performances that rival 2008.

1977 saw a decline in the Dow Jones Industrial Average of 17.3%.

1974 saw a decline in the DJIA of 27.5%. The year before that (1973) saw a decline of 16.6%. This occurred during the height of the inflationary crisis that crippled the US economy in the early 70s.

After 1974, you need to start going back into the 30's, 20's and beyond to find years that were as bad as 2008 has been.

In 1937, the DJIA posted a decline of 32.82%.

In 1932, the DJIA posted a decline of 23.07%.

The Granddaddy of all declines took place in 1931. The Dow Jones Industrial average tumbled an incredible 52.67% that year. To give you an idea of how bad things were for the DJIA during the Great Depression - the markets fell 33.77% in 1930, 52.67% in 1931 and 23.07% in 1932.

If the Dow Jones Industrial Average stabilized and only closed down 28% in 2008 (which might be wishful thinking), then it would go down as the 7th worst year on record:

1931 -> -52.67%
1907 -> -37.73%
1930 -> -33.77%
2008 -> -33.6%
1920 -> -32.90%
1937 -> -32.82%
1914 -> -30.72%

So if you were wondering how bad 2008 has been in comparison to previous years, there you go. With the Asian stock markets tanking tonight, it appears as though the Dow has a good chance of pushing past the 30% decline mark for 2008 tomorrow. Let's hope not.

Note: This information is not updated regularly. For up to date data, please visit our Dow Jones Historical Data page.


Filed under: The Economic Meltdown | General Market News | Stock Market Education