27 October 1997: Asian crisis triggers the first circuit breakers
Fears spreading from the Asian financial crisis, which had hit Hong Kong hard days earlier, sent the Dow down 554 points, about 7 percent. For the first time, the New York Stock Exchange's circuit breakers kicked in and halted trading early. The next day the market rebounded sharply on heavy volume. A crisis on the other side of the world proved how connected markets had become.
The lesson: In a connected world, distant crises arrive fast, and often leave just as fast.
What it meant for investors
$1,000 in S&P 500 index fund at the start of 2000 → $4,626 today, vs $4,626 in the S&P 500.
We start the clock at the start of 2000, the first year in our price data after the event. 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 |
|---|---|---|---|
| 2000 | $1,470 | $4,626 | $4,626 |
| 2003 | $880 | $7,727 | $7,727 |
| 2005 | $1,180 | $5,763 | $5,763 |
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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