As the economy continues its tumoultous ups and downs I was recently pondering the often misundertood problem of reorting these ups and downs as percentages. For example, today in the New York Times I read that the S & P 500 has risen more than 25% since March 29, 2009. Yet on that exact same date, March 28, 2009, it was claimed that on March the same S & P 500 had fallen over 50% since its peak in May 2007. How many people reading only the first half of that lst sentance would beleive that there investments may now have regained 1/2 of what they had lost since that high point back in 2007. Well a quick look at the real numbers will show how wrong such an assumtion really is.
Lets say your portfolio had a value of $250,000 in March 2007
then as a result of the 50% fall in the markets by on March 29, 2009 its value would have fallen to $125,000, now on April 10, 2009 after the recent 25% rise in the market your portfolio is worth $156,250. So your still down 38% from the peak in 2007
There you have it! Percentages can easily lead you to make silly assumtions
the Associate Press reported that the
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