By Jason Seidl, Contributing Editor

The S&P 500 and the Dow Jones Industrial Average are down 36% and 41% on a year-to-date basis as I write this column. Investors have not had to contemplate such drastic declines in the broader market indices since the Great Depression. Indeed, investors have been forced to digest a steady stream of negative economic news for both the U.S. and global economies. Additionally, hedge funds saw an unprecedented wave of redemptions, forcing many funds to dumps shares on the open markets. Longer-term-focused mutual funds also suffered from fund redemptions and many chose to keep the maximum allowed cash position in their funds rather than try to catch the proverbial knife. Hence, with many funds dumping shares and little incremental buying, the markets suffered.