19 October 1987: Black Monday: the Dow loses 22.6 percent
The Dow Jones Industrial Average fell 508 points, or 22.6 percent, in a single session, still the largest one-day percentage drop in its history. Computerized portfolio insurance selling fed on itself, and exchanges struggled to keep up. Yet the economy did not collapse, and the Dow ended 1987 slightly higher than it began. Anyone who panic-sold missed a decade of extraordinary gains that followed.
The lesson: The market can fall a fifth in a day and still reward the patient.
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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