Recovery period after market downturns
Author: Sound Choices
May 23, 2019
While market volatility causes uncertainty, its occurrence is actually a certainty. This series of articles provides insight to help put volatility into perspective.
In a crisis, investors may think that the trigger is something entirely new. However, no matter the cause, there has historically been a consistent pattern of strong recovery one to two years after the crisis low.
|Event Date||1 year later||2 years later|
|1948-49 Berlin Blockade*||July 19, 1948||-3.3%||13.2%|
|1950-53 Korean War*||July 13, 1950||28.8%||39.3%|
|1962 Stock Market Break*||June 26, 1962||32.3%||55.1%|
|1962 Cuban Missile Crisis*||October 23, 1962||33.8%||57.3%|
|1963 Kennedy Assassination*||November 22, 1963||25.0%||33.0%|
|1964 Gulf of Tonkin*||August 6, 1964||7.2%||3.1%|
|1969-70 Stock Market Break*||May 26, 1970||43.6%||53.9%|
|1973-74 Stock Market Break*||December 6, 1974||42.2%||66.5%|
|1979-80 Oil Crisis*||March 27, 1980||27.9%||5.9%|
|1987 Stock Market Crash*||October 19, 1987||22.9%||54.3%|
|1990 Persian Gulf War*||August 23, 1990||23.6%||31.3%|
|2001 September 11th Terrorist Attack on U.S.**||September 11, 2001||-8.1%||2.9%|
|2003 Invasion of Iraq by Coalition Forces**||March 31, 2003||29.9%||34.7%|
|2008-09 Peak of Sub-prime Mortgage Collapse**||March 6, 2009||64.8%||95.1%|
**Source: Morningstar Direct, as at February 8, 2018, Dow Jones Industrial Average Total Return Index (U.S. $)
The information provided is for illustrative purposes only and is not meant to provide investment advice. You cannot invest directly in an index. All information in Canadian dollars unless otherwise stated.
A financial advisor can help you understand current market events and help you understand how they may impact your investments and your plan. If you’re concerned about market volatility, contact your financial advisor.
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