19 February 2020: The S&P 500 hits a record before COVID
The S&P 500 closed at a record 3,386.15. Unemployment was low, the virus seemed like a mainly Chinese problem, and investors were relaxed. Over the next five weeks the index fell about a third, the fastest bear market in history. Then it recovered to new highs by August. Anyone who sold in panic in March and waited for clarity missed one of the sharpest rebounds ever.
The lesson: The calmest-looking moments can come right before the storm, and the scariest right before the recovery.
What it meant for investors
$1,000 in S&P 500 index fund at the start of 2020 → $2,092 today, vs $2,092 in the S&P 500.
We start the clock at the start of 2020, the year it happened. That is 2.1 times the money, but $0 less than a plain index fund made over the same years.
What S&P 500 index fund teaches: Owning the whole market removes the risk of picking the wrong company but not the risk of a lost decade, so time horizon matters as much as diversification.
| Bought in | Price then | Worth today | S&P 500 would be |
|---|---|---|---|
| 2015 | $2,060 | $3,301 | $3,301 |
| 2018 | $2,700 | $2,519 | $2,519 |
| 2020 | $3,250 | $2,092 | $2,092 |
green = beat the S&P 500 · red = lost money
What if you bought S&P 500 index fund? Every starting year and the full story →
More S&P 500 index fund history
- 5 February 2018: Volmageddon: the Dow drops 1,175 points
- 29 February 2020: The US reports its first COVID-19 death
- 3 March 2020: The Fed makes an emergency rate cut
- 6 March 2009: The S&P 500 touches 666
- 9 March 2009: The bear market bottoms
- 12 March 2020: Black Thursday: the worst day since 1987
Could you have called it at the time? The wheel picks the year, you pick the position, ten seconds a pick.
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