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After significant declines, stocks have tended to break even quickly. One year after each of the S&P 500 Index’s 10 worst one-day drops (prior to 2020), the Index notched double-digit positive returns in all but one instance—and remained positive three and five years later, too. This is a hopeful sign for long-term investors since three of the worst single-day declines occurred in 2020. The chart below doesn’t include reinvested dividends, which would have made the returns even higher.

10 Worst Single-Day Percent Declines for US Stocks 1980–2020

Date Cause     Annualized (%)
One-Day Fall (%) # Days To Reach Previous High Return After 1 Year Return After 3 Years  Return After 5 Years
1.  October 19, 1987 Black Monday 20.47 264 23.19 11.59 13.03
2.  March 16, 2020 COVID-19 Pandemic
11.98 19 66.07
? ?
3.  March 12, 2020 COVID-19 Pandemic
9.51 20 58.96
? ?
4.  October 15, 2008 Global Financial Crisis
9.03 15 20.79 10.50 13.34
5.  December 1, 2008 Global Financial Crisis
8.93 6 35.85 15.11 17.22
6.  September 29, 2008 Global Financial Crisis 8.79 410 4.14 1.60 8.87
7.  October 26, 1987 Black Monday 2.0 8.28 5 23.59 10.20 12.92
8.  October 9, 2008 Global Financial Crisis
7.62 3 17.76 8.30 12.73
9.  March 9, 2020 COVID-19 Pandemic
7.60 57 41.10
? ?
10.  October 27, 1997 Asian Financial Crisis
6.87 8 21.48 16.30 0.47

Past performance does not guarantee future results. Data shown is for the S&P 500 Price Index as of 3/31/20 and does not include the reinvestment of dividend payments. Indices are unmanaged and not available for direct investment. Data Sources: Morningstar, Ned Davis Research, and Hartford Funds, 4/21.

Talk to your financial professional today to make sure your portfolio is positioned to help achieve your long-term goals.

S&P 500 Index is a market capitalization-weighted price index composed of 500 widely held common stocks.

 

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