While no two events are the same, history has an ability to put events into context and place a perspective on current situations. The Corona / Covid-19 crisis has brought uncertainty to our personal lives as well as stock market. The stock market loathes uncertainty and has reacted with drastic swings and losses since the spread of the virus began mid-February. As recently as Valentine’s Day, investing may not have been something we gave much thought too. We contributed through our payroll deductions or regular bank drafts and overall it was a bit of an after-thought. Recently, investors may be feeling concern and fear.
History shows us that every year there has been a domestic or worldwide event that has provided a reason not to invest. When I meet with investors and I show this chart, the comment I often hear is “I wish I would have been in the market then” and name your time and event.
I can’t predict how long this will last and how deep it may go. Recently I am hearing “the USA is about 50 days behind China’s Covid-19 timeline.” 50 days from today puts us at May 5th. My hope in writing this blog is to provide you a historical perspective that “this too shall pass.” If you have questions or concerns, please call or email. I am here to help.
Every year there has been a reason not to invest:
1934 | Depression | 1963 | Kennedy Assassination | 1992 | Los Angeles riots |
1935 | Civil War in Spain | 1964 | Gulf of Tonkin | 1993 | Midwestern U.S. floods |
1936 | Economy still struggling | 1965 | Civil rights marches | 1994 | Fed raises interest rates 6 times |
1937 | Recession | 1966 | Vietnam War escalates | 1995 | Dow tops 4000, then 5000- market “too high” |
1938 | War clouds gather | 1967 | Newark riots | 1996 | Technology stocks tumble |
1939 | War in Europe | 1968 | North Korea captures USS Pueblo | 1997 | Chaos in Asian markets |
1940 | France falls | 1969 | Money tightens; market falls | 1998 | Global economic turmoil |
1941 | Pearl Harbor | 1970 | U.S. invades Cambodia | 1999 | Fears of Y2K computer problems |
1942 | Wartime price controls | 1971 | Wage-price freeze | 2000 | Internet bubble bursts |
1943 | Industry mobilizes | 1972 | Watergate | 2001 | Terrorist attacks in U.S. |
1944 | Consumer goods shortage | 1973 | Oil embargo | 2002 | Corporate accounting scandals |
1945 | Post-war recession predicted | 1974 | Nixon resigns | 2003 | U.S. invades Iraq |
1946 | Dow tops 200 – market “too high” | 1975 | U.S. withdrawals from Vietnam | 2004 | Oil prices soar |
1947 | Cold War begins | 1976 | New York City threatens bankruptcy | 2005 | Hurricanes devastate southern U.S. |
1948 | Berlin blockade | 1977 | Energy crisis | 2006 | Dow Jones tops 12,000 for the first time |
1949 | Soviets detonate A-bomb | 1978 | Massacres in Cambodia | 2007 | Subprime credit crisis |
1950 | Korean War | 1979 | Three Mile Island nuclear accident | 2008 | U.S. recession |
1951 | Excess profits tax | 1980 | Abscam scandal rocks Congress | 2009 | U.S. unemployment tops 10% |
1952 | U.S. seizes steel mills | 1981 | Reagan & the people are shot | 2010 | Gulf of Mexico oil spill |
1953 | Soviets detonate H-bomb | 1982 | Worst recession in 40 years | 2011 | European sovereign debt crisis |
1954 | Dow tops 300 – market “too high” | 1983 | Soviets shoot down a Korean airliner | 2012 | U.S. faces “fiscal cliff” |
1955 | Eisenhower illness | 1984 | Iran-Iraq war escalates | 2013 | 5th Yr. of fed. govt’s quantitative easing policy |
1956 | Suez Crisis | 1985 | U.S. becomes a debtor nation | 2014 | U.S. drawn into Syrian conflict |
1957 | Soviets launch Sputnik | 1986 | U.S. bombs Libya | 2015 | Greek debt crisis, China growth slows |
1958 | Recession | 1987 | Record-setting market declines | 2016 | Wave of populism affects elections around world |
1959 | Castro seizes power in Cuba | 1988 | Bank failures peak | 2017 | Hurricanes pummel the U.S. & Caribbean |
1960 | Soviets down U-2 plane | 1989 | Problems with junk bonds | 2018 | U.S. trade war with China |
1961 | Berlin Wall is erected | 1990 | Iraq invades Kuwait |
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1962 | Cuban Missile Crisis | 1991 | Recession in U.S.; Soviet Union dissolves |
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Disclosures: “1934-2018 Reason not to Invest” chart provided by Capital Management. Investing involves risk, including loss of principal. Content in this material is for general information and is not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and many not be invested into directly. No strategy assures success or protects against loss.