7 July 2005: London bombings, and a market that held its nerve
Terrorist bombs struck London's transport network during the morning rush hour, killing 52 people. The FTSE 100 fell sharply in early trading as shock spread, but it recovered much of the drop by the close, and within days markets were back where they started. The human tragedy was immense; the lasting economic damage was far smaller than the first hour of trading suggested. Markets often react hardest in the moments when they know least.
The lesson: The first market reaction to a shock is a guess made in panic, not a considered verdict.
What it meant for investors
$1,000 in FTSE 100 at the start of 2005 → $2,021 today, vs $5,763 in the S&P 500.
We start the clock at the start of 2005, the year it happened. That is 2.0 times the money, but $3,742 less than a plain index fund made over the same years.
What FTSE 100 teaches: When an index pays high dividends, its price chart tells only half the story, and comparing price indices across countries can mislead badly.
| Bought in | Price then | Worth today | S&P 500 would be |
|---|---|---|---|
| 2005 | $4,800 | $2,021 | $5,763 |
| 2007 | $6,200 | $1,565 | $4,789 |
| 2008 | $6,400 | $1,516 | $4,626 |
green = beat the S&P 500 · red = lost money
What if you bought FTSE 100? Every starting year and the full story →
More FTSE 100 history
- 24 June 2016: Britain votes for Brexit and markets panic
- 14 September 2007: Northern Rock triggers Britain's first bank run in generations
- 21 September 1931: Britain leaves the gold standard
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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