May 7, 2010

I Did NOT Lose 36% of My Money Yesterday

Yesterday the stock market crashed a bit.   The overall market indexes lost 3-4%.  Thats a pretty significant sell off.   At one point I glanced at my Roth IRA investments and I saw a figure that gave me temporary mini panic attack.   I took a quick screen shot of the Yahoo finance page and here is what I saw:


VYM is one of the positions that I hold in my Roth IRA.   VYM is the Vanguard High Dividend Yield Indx ETF.  This is not an individual stock but its an index fund.  

You can see when I snapped that screen shot it was down 36.7% at that time.   This is the bit that made me momentarily panic.    But then I noticed that the real-time quote was "only" down 6.6% or $2.65.    Look a little closer and see that the day range figure is 0.10 - 39.60.   That means at some point during the day the index had apparently dropped to just $0.10.  

Something is obviously wrong with this.  The market was bad yesterday but not that bad.

I found some discussion of possible errors made.   One account from the AP says that "There were reports that the sudden drop was caused by a trader who mistyped an order to sell a large block of stock." and also that "Nasdaq issued a statement two hours after the market closed saying it was canceling trades that were executed between 2:40 p.m. and 3 p.m. that it called clearly erroneous. It did not, however, mention a cause of the plunge."

 I don't know if VYM was literally trading for $0.10 yesterday or if this just an error in the system.   But in any case the stock was down $1.25 at $38.40 at the end of the day.   So I didn't actually lose over 1/3 of my money. Whew.

I checked the pressroom page at the Vanguard site to see if they had anything about it but there wasn't any new press releases there about it.    There may be more news in the future to explain exactly what happened, I'll keep my eye out.

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