One Year After the Peak

One year ago, the Dow closed at 14,164.53.

Today, after a dramatic late-day collapse, it finished at 8,579.19.

That's a one-year decline of 39 percent.

The following chart shows, in blue, how the Dow has fared one year after previous peaks. The dark red segments show how far the index would eventually fall before recovering. The yellow segments show how far the Dow fell in those cases where the trough happened before one year had passed after a peak.

We've already moved past the worst of the tech crash and are 6 percentage points (or another 800 index points) from matching the post-1973 peak decline.

But we're still a long ways from the Great Depression crash. One year after the 1929 peak with the index at 381.17 points, the Dow had barely moved lower, yet it would eventually lose 89 percent. The Dow would have to fall another 7,047 points from today's close to reach that level.

The biggest ever year-over-year loss happened on June 27, 1932, when the index hit 42.93. One year prior, the Dow was at 152.67 for a loss of 72 percent.

UPDATE

David Leonhardt paints a similar picture with inflation-adjusted S&P data.