20 November 2008: S&P 500 sinks to an 11-year low
The S&P 500 closed around 752, its lowest level since 1997, wiping out over a decade of gains. Investors had endured bank failures, a frozen credit market and a recession. Many concluded stocks were dead money. The index would fall further, bottoming in March 2009, but anyone who bought in late 2008 and simply held on earned spectacular returns over the following decade.
The lesson: The best long-term buying opportunities usually feel like the worst time to invest.
What it meant for investors
$1,000 in S&P 500 index fund at the start of 2008 → $4,626 today, vs $4,626 in the S&P 500.
We start the clock at the start of 2008, the year it happened. That is 4.6 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 |
|---|---|---|---|
| 2008 | $1,470 | $4,626 | $4,626 |
| 2010 | $1,120 | $6,071 | $6,071 |
| 2012 | $1,280 | $5,312 | $5,312 |
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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