8 July 1932: The Dow hits rock bottom at 41.22
The Dow Jones Industrial Average closed at 41.22, its lowest point of the Great Depression and down roughly 89 percent from its 1929 peak. Nobody rang a bell. Pessimism was total, unemployment was crushing and many investors had given up on stocks entirely. Yet this was the bottom, and it never fell that low again. Anyone who bought then had to stomach terrifying headlines, but was rewarded handsomely over the following years.
The lesson: Maximum pessimism and maximum opportunity tend to arrive together, without any announcement.
What it meant for investors
$1,000 in S&P 500 index fund at the start of 1990 → $19,429 today, vs $19,429 in the S&P 500.
We start the clock at the start of 1990, the first year in our price data after the event. That is 19.4 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 |
|---|---|---|---|
| 1990 | $350 | $19,429 | $19,429 |
| 1995 | $460 | $14,783 | $14,783 |
| 2000 | $1,470 | $4,626 | $4,626 |
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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