9 October 2007: S&P 500 closes at a record, then the floor gives way
The S&P 500 closed at a record 1,565 and the Dow at just over 14,164, both peaks that would not be seen again for years. Subprime mortgage trouble had been in the news for months, yet investors celebrated. Within 17 months the S&P had lost more than half its value. Nobody rang a bell at the top; the record high looked, at the time, like good news.
The lesson: Record highs feel safest exactly when you have the least margin for error.
What it meant for investors
$1,000 in S&P 500 index fund at the start of 2007 → $4,789 today, vs $4,789 in the S&P 500.
We start the clock at the start of 2007, the year it happened. That is 4.8 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 |
|---|---|---|---|
| 2007 | $1,420 | $4,789 | $4,789 |
| 2008 | $1,470 | $4,626 | $4,626 |
| 2010 | $1,120 | $6,071 | $6,071 |
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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