You Knew Stock Prices Were Plunging; Here's How Insane It's Gotten – Investor's Business Daily

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You knew S&P 500 stocks are selling off. But did you know the plunges are adding up to serious losses — as a surprisingly large number of stocks erase more than 75% of your money.
More than 125 stocks in the broad S&P 1500 index, which includes the S&P 500, are now down 75% or more from their all-time highs, says an Investor’s Business Daily analysis of data from S&P Global Market Intelligence and MarketSmith. Losing three-quarters of your money on a stock in a major index is a staggering wake-up call that’s easily missed if you’re only looking at the index. And it’s also a big-time warning to anyone thinking about buying the dip.
Following Tuesday’s 1.6% drop, the S&P 500 itself is off more than 10% from its all-time closing high notched on Jan. 3 of this year. That’s bad enough. It puts the index squarely in a correction in just a few months. But even a 10% drop looks tame to some of the wealth destruction taking place in the S&P 500 and beyond. Just this quarter, investors lost more than $5 trillion in stock wealth, says Wilshire Associates.
“Wall Street is hitting the sell button on everything except for energy stocks,” said Edward Moya, strategist at Oanda. “Traders are trying to reduce their exposure to anything that has exposure to Russia and some are getting concerned that a prolonged economic slowdown is here.”
Not seeing the pain yet? Just dig a little under the S&P 500’s surface, and you find some major wealth-destruction events.
More than 40% of S&P 1500 companies’ shares are down 10% or more just this year. That leaves 26% of the stocks down by 30% or more from their highest points in a year. And now, more than a quarter of S&P 1500 stocks lost half, or more, of their value from their all-time highs — even if those peaks were hit years ago.
That’s some serious stock-specific pain. Perhaps most startling is the sheer number of S&P 1500 stocks plunging from their all-time highs.
That goes for many S&P 500 financials that still are miles away from their all-time highs notched prior to the 2008-09 financial crisis. Insurer American International Group (AIG) has seen its shares drop nearly 9% just this year to 57.89. That’s not bad. But it only adds to generational pain for anyone owning that stock long term. It’s still down 97% from its all-time split-adjusted high of 2,075 high in late 2000.
Smaller stocks, too, are getting pounded down to historic levels. S&P 1500 digital health company OptimizeRx (OPRX) is now down more than 30%, to 43.24, just this year. That leaves the ailing stock off 56.4% from its 52-week high. But startlingly, it’s now down 99.3% from its all-time high set in late 2006. That’s a long time to lose money.
But stocks aren’t just plunging from all-time highs set in previous market tops. Some stocks’ recent highs are miles away, too.
Financial firm SelectQuotes (SLQT) has seen its shares plunge more than 91% from their all-time high of 33 set on April 13, 2021. That drop has only intensified. Shares are off more than 68% just this year. Fallen “meme stock” GameStop (GME) is a more familiar example. Shares of the video-game retailer are down more than 19% just this year to 119.02. That might not sound too bad until you realize they’ve plunged more than 75% from the all-time closing high of 483 hit on Jan. 28, 2021.
Corrections and bear markets are a reminder of how important the No. 1 rule in investing is for savvy investors. And they’re a refresher on why a crashing stock might keep crashing. Nine of the 10 S&P 1500 stocks down the most from their all-time highs set those peaks in 2015 or earlier. So if you’re waiting to get your money back, it’s been a long haul.
And a 10% fall in the S&P 500 doesn’t explain the pain you’re probably feeling.
S&P 1500 stocks down more than 75% from their all-time highs and 40% from their 52-week highs (ranked by year-to-date loss)
Follow Matt Krantz on Twitter @mattkrantz
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