Three demoralizing developments have forced the stock market to its knees in recent weeks, as the level of fear for investors ticked upward and the major indexes slumped over 5%. The old stock market saying, "Sell in May and go away," could not seem closer to the truth given the near uniform collapse of the Dow Jones Industrial Average
Through the month of March, all three seemed poised to deliver record returns for investors, gaining an average of 11% across the board during that time frame. April was basically a wash, however, and May has been utterly dismal. The chart below illustrates this devastating decline.
At this point, the underlying reasons for this collapse have become all too familiar. In fact, it would be hard to think of a worse sequence of events that would rehash the gut-wrenching market events of the past decade or so.
First off, the convoluted European saga continues to depress markets around the world, lingering on like a gloomy guest at an otherwise boisterous dinner party. At this point, the austerity requirements for Greece would cut so deep that the country will probably be extracted from the euro experiment altogether. It's only fitting, perhaps, that one of the smallest players in this tragic drama could yet lead to the demise of the currency in a domino-like fashion. Nevertheless, investors seem to be sitting on the sidelines to watch how this plays out.
As we recoil from the Greek tragedy, investors faced another unpleasant surprise in recent weeks when JPMorgan Chase
Finally, the most recent blow to investor confidence arrived last week in the shape of an ill-conceived Facebook
Each of these events shocked the markets, and investors are reminded in one fell swoop of the financial crisis, the failed currency experiments, and the IPO bubbles that have crushed our confidence repeatedly over the past 15 years. The most logical response to all of this turmoil is a flight to so-called "risk-free" assets like Treasuries for many investors. With yields hitting record lows, however, is there a more attractive way to ride out the market? One could do worse than invest in high-yielding stocks, and your first move should be to read our recent special report, "Secure Your Future With 9 Rock-Solid Dividend Stocks." In the midst of a roller-coaster market, these stocks offer stability in the form of cold, hard cash.
Isaac Pino has no positions in the stocks mentioned above. The Motley Fool owns shares of JPMorgan Chase. The Motley Fool has a disclosure policy. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.
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