Big gains followed a brutal bear market

Stock markets closed its best quarter since 1998 on Wednesday and posted big gains following a seventeenth months of cruel bear market. Stock markets have rallied since the early spring and gained steam over the summer, wrote SmartInMoney.com.

The Dow Jones Industrial Average index is up 48% from its March 9 low and up 11% this year, although still down 31% from its October 2007 record.

The Standard & Poor's 500-stock index is up 17% for the year and up 56% from its March low but off 32% from its October 2007 high.




For the past seven months, it has been a beta-driven rally. As investors took advantage of the easy money and moved back into riskier assets, many of the biggest decliners during the crisis posted the largest gains. Buying volatile stocks is known as a beta trade. A financial statistic called beta is a measure of an individual stock's moves in relation to the market. A stock with a beta of two, it historically moves twice as much as the market.

Read the full article at SmartInMoney