29 October 1929: Black Tuesday
The worst day of the 1929 crash saw over 16 million shares traded, a record that stood for decades, as investors who had bought on borrowed money were wiped out. The Dow fell about 12 percent, following a similar drop the day before. The crash marked the end of the Roaring Twenties and the beginning of a bear market that would not bottom until 1932.
The lesson: Leverage turns a falling market into a catastrophe for the people using it.
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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