Past Market Movements: Prices Can Be Very Volatile

Examination of Past Market Movements of Malaysia KLSE
What can we learn from the history of overall market movements in the Malaysia KLSE?

1. Generally Upward Trend
2. Trends Not Consistent
3. Irregular Price Patterns
4. Prices Can Be Very Volatile
5. Prices Move Volatile Upward
6. Big Booms Are Irregular

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4. Prices Can Be Very Volatile

The price movements even within a year can be considerable - the average is 38%.

The minimum movement within a year is still 19% from the highest to the lowest which is about six times greater than the average dividend yield.

This means that price changes can very quickly wipe out any return provided by dividend.

This means that the value of one's investment can vary considerably from year to year.

One must be able to sustain such losses if one wishes to invest in shares.