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Top 10 Stock Market Drops & Recoveries

US stocks have been resilient over the last four decades.



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 (as of 9/30/20)

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 ? ? ?
3.  March 12, 2020 COVID-19 Pandemic
9.51 20 ? ? ?
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 ? ? ?
10.  October 27, 1997 Asian Financial Crisis
6.87 8 21.48 16.30 0.47

Past performance does not guarantee future results. Data sources: Morningstar, Ned Davis Research, and Hartford Funds, 9/20. Data shown is for the S&P 500 Price Index as of 9/30/20 and does not include the reinvestment of dividend payments. Indices are unmanaged and not available for direct investment. 

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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