Six years after 9/11 and in the middle of a meltdown surrounding sub-prime loans in the U.S. that may lead to a recession, history has taught us that the stock markets – and our investments – are susceptible to some rather severe beatings.
In fact, there hasn’t been a year gone by since the Depression when world events have not rattled Wall Street and beyond.
When markets decline, fear is the one emotion that often takes over as people often avoid investments even though it’s a good time to buy. Seasoned investors look for opportunities in volatile markets and seek to profit from oversold conditions.
But fear prevents most people from recognizing long-term buying opportunities which present themselves when markets dive.
Most are generally able to find an excuse for not investing. But if hindsight is any indication, the financial markets have managed to survive some bruising world events, either made by man or nature.
We encourage investors to assess their time horizon, investment objectives and risk tolerance. For investors with longer-term time horizons, declines in the markets may provide an opportunity to buy quality investments at lower prices.
Winston Churchill said it best to fellow Britons during the dark days of the Second Word War: “If you are going through hell, keep going.”
The following list of stock market’s dark days will helpfully lend some perspective that the current situation is yet another bump in the road of investing: Financial markets have managed to survive the following major events:
|1929-30s||– Depression||1974||– Nixon resigns|
|1939||– Second World War begins||1975||– U.S. withdrawal from Vietnam|
|1940||– France falls||1976||– New York City blackout/bankruptcy concerns|
|1941||– PearlHarbour||1977||– Energy crisis|
|1942||– Wartime price controls||1978||– Massacres in Cambodia|
|1943||– Industry mobilizes||1979||– Three Mile Island Disaster|
|1944||– Consumer good shortage||1980||– Abscam scandal rocks Congress|
|1945||– Post-war recession predicted||1981||-U.S. Pres. Ronald Reagan & Pope Jean Paul II shot|
|1946||– Dow tops 200, market “too high”||1982||– Worst recession in 40 years|
|1947||– Cold War begins||1983||– Soviets shoot down Korean airliner|
|1948||– Berlin blockade||1984||– Iran/Iraq war escalates|
|1949||– Soviets explode A-bomb||1985||– U.S. become a debtor nation|
|1950||– Korean War||1986||– Bombing in Libya|
|1951||– Excess profits tax||1987||– Record setting market decline|
|1952||– U.S. steel strike||1988||– Bank failures peak|
|1953||– Soviets explode H-bomb||1989||– Junk bond crisis|
|1954||– Dow tops 300, market “too high”||1990||– Iraq invades Kuwait|
|1955||– Eisenhower illness||1991||– U.S. recession, USSR dissolves|
|1956||– Suez crisis||1992||– Los Angeles riots|
|1957||– Soviets launch Sputnik||1993||– Great flood|
|1958||– Recession||1994||– Federal Reserve raises rates six times|
|1959||– Castro seizes power||1995||– Dow tops 4,000 then 5,000, market “too high”|
|1960||-Soviets down spy plane||1996||– Technology stock stumble|
|1961||– Berlin Wall erected||1997||– Asian financial crisis|
|1962||– Cuban missile crisis||1998||– Global economic turmoil|
|1963||– Kennedy assassinated||1999||– Fears of Y2K problem|
|1964||– Gulf of Tonkin, Vietnam||2000||– Internet “bubble” bursts|
|1965||– Civil rights marches||2001||– Terrorist attacks in U.S.|
|1966||– Vietnam war escalates||2002||– Worst bear market since ’29-32, Enron Tyco, Worlcom|
|1967||– Newark riots||2003||– War in Iraq, SARS|
|1968||– USS Pueblo seized, Korea||2004||– Madrid terrorist bombing, Asian tsunami|
|1969||– Money supply tightens, market falls||2005||– Terrorist attacks in London, hurricane Katrina|
|1970||– Cambodia invaded, war spreads||2006||– U.S. housing market declines, Iran nuclear program|
|1971||– Wage/price freeze||2007||– Subprime mortgage loans|
|1973||– Oil embargo|