In The Long Run The Black Monday Was A Blip

On Monday, October 19, 1987 the Dow Jones Industrial Average fell an astonishing 22.61%. This was one of the largest declines in the US markets. Though “Black Monday” was scary it was a great time to buy stocks. In fact, in the long run the declines of that Monday turned into just a blip according to an article at Schroders.

MSCI USA: 1970-2017 and the blip that was Black Monday

MSCI performance between 1970 and 2017



From the article:

The market blip that was Black Monday
The chart below reflects the fluctuations in the US stockmarket since 1970. It illustrates how Black Monday registered as barely a blip in the long term and how resilient stocks have been over the last 47 years.

Those who invested after Black Monday would have seen $100 turned into $1,135 without considering the dividend income paid out. That high return was achieved despite remaining invested through the dotcom crash of 2000-03 and the global financial crisis of 2007-09.

Source: Black Monday 30 years on: how it happened and what we can learn, Schroders

The key takeaway is that dramatic declines on a single day may become insignificant when looked at a long-term perspective of many years.

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