Thursday was one of the biggest one day blowups in the stock market that I can remember during my entire career.
Here is Eddy Elfenbein:
“President Trump declared Wednesday to be “Liberation Day.” This is when Americans would finally be released from the bootheel of unfair trade policies. Unfortunately for many investors, all they were liberated from was their money.
Thursday was the worst day for the S&P 500 in nearly five years. For the day, the index lost 4.8%, and that was one of the better indexes. The Nasdaq was off by 6%, and the Russell 2000 fell 6.6%. In fact, the Russell is now in a bear market. The S&P 500 High Beta Index was down more than 9%. All told, the S&P 500 lost $2.4 trillion yesterday.”
While I haven’t actually heard anyone in the real world *freaking out* yet about this decline (seriously), the internet does indeed inform me that people are *freaking out.* Considering the Trump angle, I don’t doubt this is the case. And at least in the near term, Mr. Market is telling us this is pretty bad. At around a 15% decline from the all-time highs as of this writing, it looks very possible that we go into bear territory (e.g. 20%+ decline).
I guess I like to try and strike a balance between myopic market cheerleading (‘Please overlords, make my portfolio go up’) and black-pilled doomerism (‘when it all hits the fan, plastic water bottles are the common currency’). History tells us there is some merit to this sort of disposition.
So with this in mind, let’s go through the venerable Investment Advisor custom of revisiting past market declines and see if we can glean any wisdom.
Peak: Sep 7, 1929 – S&P 500 at 31.92
Trough: June 1, 1932 – S&P falls to 4.40 (−86% total)
Duration: ~33 months. Full recovery took until 1954 (25 years).
What Happened: The Roaring '20s credit boom ended with the 1929 crash, triggering widespread bank failures and the Great Depression.
Cultural Context: The #1 song was "Tiptoe Through the Tulips" by Nick Lucas; the best-selling book was All Quiet on the Western Front by Erich M. Remarque. By 1932, "Brother, Can You Spare a Dime?" captured the Depression zeitgeist.
Peak: Mar 6, 1937 – S&P at 18.68
Trough: Mar 31, 1938 – S&P falls to 8.50 (−54% decline)
Duration: ~13 months.
What Happened: A sharp economic relapse during Depression recovery, attributed (at the time) to Fed tightening and New Deal fiscal cuts.
Cultural Context: #1 song was "Sweet Leilani" by Bing Crosby; best-selling novel was Gone with the Wind by Margaret Mitchell; MLB's top hitter was Joe Medwick (.374).
Peak: Oct 25, 1939 – S&P around 13.2
Trough: Apr 28, 1942 – S&P hits 7.47 (−32% from 1939 peak)
Duration: ~30 months.
What Happened: World War II: Nazi Germany's invasions and Pearl Harbor created global crisis. The U.S. entered WWII.
Cultural Context: #1 song was "Only Forever" by Bing Crosby; best-selling book was How Green Was My Valley by Richard Llewellyn. Ted Williams hit .406 in 1941 (the last .400+ season).
Peak: May 29, 1946 – S&P 19.25
Trough: Oct 9, 1946 – S&P 14.12 (−26.6%)
Duration: ~5 months. Recovery was relatively quick.
What Happened: Post-war challenges included the end of wartime price controls (sparking inflation), credit tightening, and labor strikes. This "buyers' strike" punctured post-WWII exuberance.
Cultural Context: #1 song was "Prisoner of Love" by Perry Como; top novel was The King's General by Daphne du Maurier; Ted Williams won the batting crown (.342) after returning from military service.
Peak: Nov 29, 1968 – S&P 108.37
Trough: May 26, 1970 – S&P 69.29 (−36% decline)
Duration: ~18 months.
What Happened: Stagflation began. Vietnam War costs mounted, domestic unrest intensified, and inflation reached ~6% by 1969.
Cultural Context: #1 song was "Hey Jude" by The Beatles; best-selling novel was Airport by Arthur Hailey; Hall of Famer Rod Carew won the AL batting title (.332) in 1969.
Peak: Jan 11, 1973 – S&P 120.24
Trough: Oct 3, 1974 – S&P 62.28 (−48.2%)
Duration: ~21 months. Recovery was slow, peak not regained until 1980.
What Happened: A perfect storm: collapse of the Bretton Woods system, double-digit inflation, and the 1973 Arab Oil Embargo led to skyrocketing oil prices and deep recession. The Watergate scandal eroded.
Cultural Context: #1 song was "Tie a Yellow Ribbon Round the Ole Oak Tree" by Tony Orlando & Dawn (I totally forgot about this song); best-selling fiction was Jonathan Livingston Seagull by Richard Bach; MLB batting champ was Hall of Famer Rod Carew (.350 in 1974).
Peak: Aug 25, 1987 – S&P 336.77
Trough: Dec 4, 1987 – S&P 223.92 (−33.5%)
Duration: ~3 months. Most damage occurred on Oct 19, 1987 – "Black Monday" – when the Dow fell 22.6% in one day.
What Happened: Computerized trading & market panic: After a long rally, new portfolio-insurance trading strategies led to cascade selling when concerns about rising interest rates and deficits emerged. Automated sell orders overwhelmed the system, causing the fastest crash in history.
Cultural Context: #1 song in October was "Bad" by Michael Jackson; best-selling book was The Tommyknockers by Stephen King; Tony Gwynn won the batting title (.370).
Peak: Mar 24, 2000 – S&P 1527.46
Trough: Oct 9, 2002 – S&P 776.76 (−49.1%). Nasdaq fell ~78%.
Duration: ~2½ years. Recovery took 7 years.
What Happened: The late '90s tech mania collapsed as many unprofitable dot-com companies with sky-high valuations faltered. A mild recession in 2001 and the 9/11 terrorist attacks worsened conditions. Corporate scandals (Enron, WorldCom) further eroded trust.
Cultural Context: #1 song was "Breathe" by Faith Hill; best-selling book was The Brethren by John Grisham; Nomar Garciaparra and Todd Helton tied for batting title (.372).
Peak: Oct 9, 2007 – S&P 1565.15
Trough: Mar 9, 2009 – S&P 676.53 (−56.8%) – deepest drop since the Depression
Duration: ~17 months. Recovery to 2007 peak took 5½ years.
What Happened: The housing bubble collapsed, triggering subprime mortgage defaults. Complex financial derivatives imploded, leading to the collapse of major firms like Bear Stearns and Lehman Brothers. The global banking crisis and Great Recession followed.
Cultural Context: #1 song was "Irreplaceable" by Beyoncé; best-selling book was A Thousand Splendid Suns by Khaled Hosseini; While Chipper Jones hit .364 in 2008, the great Joe Mauer would hit .365 in 2009, becoming the only catcher to secure 3 titles.
Peak: Feb 19, 2020 – S&P 3386
Trough: Mar 23, 2020 – S&P 2237 (−33.9%)
Duration: Just 33 days – the fastest bear market decline ever. Full recovery by August 2020.
What Happened: The COVID-19 pandemic led to worldwide lockdowns. Economic activity halted, with GDP for Q2 2020 contracting ~32% (annualized). Unprecedented fiscal and monetary stimulus (zero rates, liquidity programs, trillions in aid, helicopter money) sparked a rapid V-shaped market recovery.
Cultural Context: #1 song was "Blinding Lights" by The Weeknd; best-selling book was A Promised Land by Barack Obama; DJ LeMahieu won the AL batting title (.364) in the shortened MLB season.
Peak: Jan 3, 2022 – S&P 4796.56
Trough: Oct 12, 2022 – S&P 3577.03 (−25.4%)
Duration: ~9 months.
What Happened: Post-pandemic inflation surged to 40-year highs (~9% in June 2022) as stimulus-boosted demand outstripped supply. The Federal Reserve hiked interest rates at the fastest pace since the early 1980s. Russia's invasion of Ukraine spiked commodity prices, worsening inflation.
Cultural Context: #1 song was "As It Was" by Harry Styles; best-selling book was It Ends with Us by Colleen Hoover as chick lit takes over; Jeff McNeil (NY Mets) won the batting title (.326).
If You Stayed the Course: By 2025, a $1 investment from 1929 had grown to roughly $7,700 with dividends reinvested – so there is evidence of long-term market resilience despite the worst drawdowns.
Nobody should want all-time highs every minute. It’s actually a good thing if the Fed doesn’t bail out your portfolio every time you cozy up on the La-Z-Boy to turn on MSNBC.
Take the long view. Remember that Joe Mauer MVP season, spin some Perry Como on the record player, and don’t yet count out the future of American industry because the TV tells you to.
-modified.png)
Andy Flattery is a CERTIFIED FINANCIAL PLANNER™ and Owner of Simple Wealth Planning. He serves affluent families that are working to lower their time preference in Kansas City and nationwide. Flattery is the host of Gentleman Speculator, a podcast on legacy, investing, and the life well-lived. When he’s not helping individuals build wealth, you can catch him playing rec sports, writing children's books, and spending time with his wife and four children.
.png)
.jpg)
