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Top 10 Stock Market Drops & Recoveries

The S&P 500 Index was generally positive in the 1-, 3-, and 5-year periods after its worst single-day declines in the last 40 years.

Client Conversations gives financial advisors an easy way to communicate with clients on topics influencing financial markets; it highlights common investor behaviors and offers ways to address the challenges investors face. Share this article with your clients, and remember to follow your firm's policies that govern sharing content with clients and prospects.

Client Conversations gives financial advisors an easy way to communicate with clients on topics influencing financial markets; it highlights common investor behaviors and offers ways to address the challenges investors face. Share this article with your clients, and remember to follow your firm's policies that govern sharing content with clients and prospects.




US stocks have been resilient over the last four decades. 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. Returns remained positive across the board three and five years later, too. 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 – 2019

Date Cause   Annualized (%)
One-Day Fall (%) Return After 1 Year Return After 3 Years  Return After 5 Years
1.  10/19/1987 Black Monday -20.47 23.19 11.59 13.03
2. 10/15/2008 Global Financial Crisis -9.03 20.79 10.50 13.34
3.  12/1/2008 Global Financial Crisis
-8.93 35.85 15.11 17.22
4.  9/29/2008 Global Financial Crisis
-8.79 -4.14 1.60 8.87
5.  10/26/1987 Black Monday 2.0 -8.28 23.59 10.20 12.92
6.  10/9/2008 Global Financial Crisis -7.62 17.76 8.30 12.73
7.  10/27/1997 Asian Financial Crisis -6.87 21.48 16.30 0.47
8.  8/31/1998 Russia Defaults on Loans -6.80 37.93 5.80 1.04
9.  1/8/1988 Brady Commission Releases Report on Causes of Black Monday -6.77 15.19 8.92 12.00
10.  11/19/2008 Global Financial Crisis -6.71 45.05 17.35 18.81

Past performance does not guarantee future results. Data sources: Morningstar, Ned Davis Research, and Hartford Funds, 3/20. Data shown is for the S&P 500 Price Index as of 12/31/19 and does not include the reinvestment of dividend payments. Indices are unmanaged and not available for direct investment. List does not include single-day declines in 2020 in order to provide returns from the ensuing 1-, 3-, and 5-year periods.

Talk to your financial advisor 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.   

Important Risks: Investing involves risk, including the possible loss of principal. 

 

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