Before we turn the page to 2012 we must take a look back at the year that just passed so we can extract context for the year to come. Looking at where the stock market began and ended in 2011, it appears nothing much happened.
As of Thursday’s close, the S&P500 was at 1,263. This notched an increase of less than one half of one percent from its year’s opening at 1,257. Obviously, these two data points, taken alone, do not offer an appropriate depiction of the year’s market. The S&P500’s 52-week range, a gaping gulch extending from 1,074 to 1,370, provides a more accurate perspective of what went on.
In short, things went haywire. Massive selloffs, like the S&P500’s 16.8 percent swan dive between July 22nd and August 8th, were followed by wild swings to the upside. Traders who capitalized on the extreme volatility may have loved it, but for those saving for retirement, via an index mutual fund, the instability was incredibly unnerving.
Geopolitically, the world’s an entirely different place than it was one year ago. After more than eight years of searching for weapons of mass destruction, the U.S. military vacated Iraq. Unexpectedly, dictators in power for a generation or more, like Muammar Gaddafi and Hosni Mubarak, were removed by popular force. Continue reading
