12 March 2020: Black Thursday: the worst day since 1987
As the pandemic spread and travel bans mounted, the Dow fell nearly 10%, its worst day since the 1987 crash. Bitcoin, pitched by some as a safe haven, crashed alongside stocks. Even US Treasury markets showed signs of strain as investors dashed for cash. When panic hits, correlations go to one and everything that can be sold gets sold.
The lesson: In a true panic, almost every asset falls together; diversification helps less than you hope.
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
- 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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