3 September 1929: The Dow peaks before the Great Crash
The Dow Jones Industrial Average closed at a record 381.17, capping a dizzying bull market fueled by easy margin credit and boundless optimism. Few saw what was coming. Within weeks the selling began, and the crash in October was followed by years of decline. The Dow would not close above that peak again until 1954, a quarter-century later. Buying at a euphoric top can mean a very long wait.
The lesson: Prices paid at a euphoric peak can take decades to recover, so valuation always matters.
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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