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