When does History say Stocks might Recover after a Market Crash?
2020 COVID-19 Market Crash
S&P 500 dropped almost 14% over two days on 11 and 12 March, bottoming out on 23 March, with declining another 10% making a total decline from peak of around 34%. This was a steep yet quick fall with a fast recovery due to Fed intervention.
2008 Subprime Mortgage Crisis
S&P500 declined by 8.8% on 29 Sep and later declined by about 20% the week of Oct. 6. The market found a bottom five months later in early March 2009 losing another 44% after the initial plunge on 29 Sep. The S&P500 lost more than half its value during the five month bear market and took more than five years for the market to return to new highs. The Fed slashed interest rates to near zero percent and initiated QE.
1987 Black Monday
The DJIA lost 22.6% on 19 Oct as a result of to overvaluation and speculation. It reached a second bottom in early December and took nearly two years to reach new highs. The crash was a valuation reset after a long bull market.
1929 Wall Street Crash
The Dow Jone plunged 23% over a two-day period in late October resulting from runaway speculation and high valuations. Several tough followed as the DJIA would decline another 82% before reaching a bottom in July 1932. The Dow’s peak to trough decline was 89% and it took 25 years for the market to fully recover.
Source: Motley Fool
S&P 500 dropped almost 14% over two days on 11 and 12 March, bottoming out on 23 March, with declining another 10% making a total decline from peak of around 34%. This was a steep yet quick fall with a fast recovery due to Fed intervention.
2008 Subprime Mortgage Crisis
S&P500 declined by 8.8% on 29 Sep and later declined by about 20% the week of Oct. 6. The market found a bottom five months later in early March 2009 losing another 44% after the initial plunge on 29 Sep. The S&P500 lost more than half its value during the five month bear market and took more than five years for the market to return to new highs. The Fed slashed interest rates to near zero percent and initiated QE.
1987 Black Monday
The DJIA lost 22.6% on 19 Oct as a result of to overvaluation and speculation. It reached a second bottom in early December and took nearly two years to reach new highs. The crash was a valuation reset after a long bull market.
1929 Wall Street Crash
The Dow Jone plunged 23% over a two-day period in late October resulting from runaway speculation and high valuations. Several tough followed as the DJIA would decline another 82% before reaching a bottom in July 1932. The Dow’s peak to trough decline was 89% and it took 25 years for the market to fully recover.
Source: Motley Fool