Fizzle Alert: Market Rallies This Good Don't Hold
By Kevin Spak,  Newser Staff
Posted Sep 21, 2009 9:49 AM CDT
This Sept. 15, 2008 file photo shows Elizabeth Rose, a specialist with Lehman Brothers MarketMakers, working her post on the trading floor of the New York Stock Exchange.   (AP Photo/David Karp, File)
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(Newser) – It's good news, bad news time for investors. The good news: In the last 100 years, only five other rallies have matched the 46% leap the Dow’s taken over the past six months. The bad news: None of those other extraordinary rallies, which came in the 1930s and 1970s, held, the Wall Street Journal reports. Like the current rally, those historical rallies came after big—in fact, even bigger—declines. While some lasted as long as two years, the big gains were all in the first six months.

“We could end up having another big decline next year,” says one strategist. “If you are looking to put money in and then not look at it for a year, you are taking a big chance.” Optimists, however, can look to the 1982 rally. At just under 40%, it wasn’t as big, but it was the lone quick burst that led to prolonged growth.