When Markets React

When Markets React

December 01, 2022

When markets take a nosedive even experienced investors can get nervous. But history has proven that the markets are resilient and unsettling events have been followed by recoveries.1 For example, the attack on Pearl Harbor in 1941 caused stock prices to decline by nearly 5% the next day. 2 But 10 years later, the markets had not only recovered, but climbed even higher than before.

In 1987 a confluence of economic issues led to Black Monday when the Dow suffered a record drop of 22.6 percent in a single day. However, by the end of 1989 just two years later, it had leveled out again.3

After 9/11, the New York Stock Exchange closed for four straight days followed by a 14% drop in the Dow, the week it reopened, but once again, the market showed resilience as the nation rallied together. And by the end of 2001, the Dow had risen about 10,000 points.4

In the aftermath of a crisis, it’s normal to worry about the future of your investments, but by maintaining a diverse portfolio and crafting a strategy that accounts for market fluctuations you may weather any storm knowing that turbulence is just part of the ride.

1"Learningfrom Stock Market Crashes Across 68 Countries and -1900 Years of Data"

2 Wikipedia.org, 2022 | MacroTrends.net, 2022

3 FederalReserveHistory.org, 2022

4 Investopedia.com, October 25, 2021 | Yahoo.Finance.com, 2022