The document discusses how 100 point moves in the Dow Jones Industrial Average, though they may sound large, have become more normal and should be expected given the overall rise in the Dow over time. It provides examples of how a 5% and 10% decline in the stock market would equate to drops of around 850 and 1,700 points respectively. The document advises investors facing market declines to maintain a long-term perspective and not panic sell quality investments, as declines provide opportunities to buy stocks at lower prices.

1. 100 Dow Points
Aren’t What They Used to Be
It can be scary when stocks decline. And even normal market volatility can be uncomfortable,
especially with large day-to-day stock market moves. The market’s increase over time has raised
the level of the Dow Jones Industrial Average (Dow) and, as a result, 100-point shifts have
become more common. That’s because 100 points aren’t what they used to be!
Kate Warne, Ph.D., CFA www.edwardjones.com
Investment Strategist Member SIPC
So let’s translate percentages into points:
A 5% decline would be a drop of about 850 points.
A 10% decline would be a drop of about 1,700 points.
These numbers may sound big, but they are in line with how
much stocks have moved up and down in the past. And,
while unsettling, they’re normal and should be expected. If
you’re prepared and not surprised, you’re less likely to react
in an emotional way.
How Not to React
Falling stock prices can test the nerves of even the most
patient investors. But remember that selling is not your only
option to limit losses. When you’re a long-term investor, the
difference between success and failure may be determined
by your actions during a stock market decline.
Take a deep breath and remember this advice:
Market declines…
 Are normal, frequent and not a reason to
sell quality investments
 Begin and end without warning
 Provide an opportunity to buy quality
investments at a lower price
Instead of waiting or worrying when the Dow drops 100
points or so, review your portfolio with your financial advisor
today. If necessary, rebalance to the appropriate mix of
stocks and bonds and be prepared to consider adding stocks
at lower prices to take advantage of such market moves.
U.S. INSIGHT REPORT
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Let’s Crunch the Numbers
With the Dow above 17,000, a gain or loss of 100
points is less than 1% – it’s actually less than 0.6%.
So expect many days when the Dow gains or loses
100 points or more, and realize that it doesn’t
make much sense to worry. Remember also that
you’ll undoubtedly see more headlines when the
Dow drops 100 points than when it rises.
Looking back, a day when the Dow moved 100
points was a big gain or loss in the 1970s and
1980s. But more recently, daily Dow moves have
frequently been 100 points or more. Of course,
daily fluctuations sometimes pile up, and there’s
always the possibility of a market pullback.
With the expectation of more interest rate chang-
es ahead, it’s important to maintain realistic
expectations about short-term stock market
declines, too. Historically, the stock market drops
by 10% about once a year, and it typically pulls
back by 5% about three times a year.1
Investing in equities involves risks. The value of your shares will fluctuate and you may lose principal.
Source: Ned Davis Research. Further distribution prohibited without prior permission. Copyright 2015 © Ned Davis Research, Inc.
All rights reserved. Past performance is not a guarantee of future results. An index is not managed and is unavailable for direct
investment.
Dow above 17,000.
Source: Bloomberg data, Edward Jones calculations.
Converting Dow Points into Percentages
Average Dow Price
% Decline for
100-point Drop
1970s 861 -11.6%
1980s 1,504 -6.6%
1990s 5,298 -1.9%
2000s 10,472 -1.0%
Today* 17,000 -0.6%