19 July 2007: The Dow tops 14,000 for the first time
The Dow Jones Industrial Average closed above 14,000 for the first time, as strong earnings and deal-making kept optimism high. Cracks in subprime mortgages were already showing, but the mood was celebratory. The Dow peaked a few months later, then fell by more than half by March 2009. The champagne did not age well. Records tend to arrive when risks are being ignored, not when they are being priced.
The lesson: All-time highs feel safest exactly when hidden risks are piling up beneath the surface.
What it meant for investors
$1,000 in S&P 500 index fund at the start of 2007 → $4,789 today, vs $4,789 in the S&P 500.
We start the clock at the start of 2007, the year it happened. That is 4.8 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 |
|---|---|---|---|
| 2007 | $1,420 | $4,789 | $4,789 |
| 2008 | $1,470 | $4,626 | $4,626 |
| 2010 | $1,120 | $6,071 | $6,071 |
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
- 19 February 2020: The S&P 500 hits a record before COVID
- 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
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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