Ewing, B. T. & Malik, F. (2000). Sector index returns and the market: An examination of the
pre- and post-crash periods. Financial Counseling and Planning, 11(2), 85-90.
An Examination Of The Pre- And Post-Crash Periods
Bradley T. Ewing1 and Farooq Malik2
Reliance on stock market sector indexes for investment makes it essential to understand how various
sectors behave relative to the market. Of particular importance is whether these relationships have
changed over time. This paper examines the risk/return characteristics of five S&P sector indexes
in pre- and post-1987 stock market crash periods. The results suggest that, relative to the market,
the volatility of some sectors may change following major events. Portfolios involving index
investing should not be thought of as totally passive strategies. In light of these changing
relationships, financial planners should make sure clients re-visit investments, especially following
major economic events.
Key words: Investment, Risk, Financial planning, Stock investing, Index funds
1. Assistant Professor, Department of Economics, Texas Tech University, Lubbock, TX 79409-1014, Phone: 806-742-2466, E-mail: firstname.lastname@example.org
2. Visiting Assistant Professor, Department of Economics, Texas Tech University, Lubbock, TX 79409-1014, Phone: 806-742-2466, E-mail:email@example.com