1 September 1998: The Dow bounces back 288 points
A day after plunging 512 points on fears tied to Russia's default, the Dow rebounded about 288 points, roughly 3.8 percent, on very heavy volume. Investors who had panic-sold on Monday watched prices recover part of the loss within hours. The turbulence was not over that autumn, but the Dow went on to new highs within months, as the late-1990s boom resumed.
The lesson: Wild swings in both directions are normal in a crisis; reacting to each one is costly.
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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