March 18, 2020
Dow Fall Below 20000
Back to February 2017
Dow Down Below 20000
Where were you January 20, 2017? While you think about it, I’ll remind you that was the day Trump was sworn into office, and the last time the Dow Jones Industrial Average closed where it did today. Astonishing. It took the Dow 110 years to reach 10,000. It took the Dow only about 1 month to lose 10,000 points. So, through today, the Dow has erased 3 years of gain since the market high 5-weeks ago. Here’s something to consider…
On March 6, 2010 the Dow was 11000. That fact by itself is meaningless. But, when you consider where is was a year before, March 6, 2009 at 6626, you might be impressed. You should be. In 12 months the Dow soared 66%. Two things I’ll give you: one, that huge gain only came after a 53% fall over a year and a half, and, two, the Dow still had a ways to go to get back to the previous high of 14200. It did. By March 7, 2013 the Dow was over 14200. It went on to close February 12, 2020 at 29568. But not with out many 10% or more corrections and a couple of falls of near 20% along the way. What I want you to take away is: What a double mistake to sell in early 2009. An investor for sure locked in real, massive losses, and missed an explosive upturn over the next year. Secondly, some investors need a reminder – -stocks go up and DOWN. History proves, stocks go back up again. Lastly, hind-sight vision is perfect. I asked to consider the market’s big bounce of the bottom. If we knew when that was. But, we do know there will be a bottom and there will be a big bounce. Already some are saying today is “the greatest buying opportunity since the financial crisis.” That is hard to argue. I just want to encourage you if you are in, stay in. If not, consider the quote above.
Here’s today’s scorecard:
In today’s developments, confirmed Covid-19 cases in the U.S. topped 8,000 with 124 deaths. The worldwide total has now surpassed 215,000 with nearly 9,000 deaths. President Trump announced the U.S. and Canada will close their border, for now. The tape looked familiar; stocks down, oil down, and investor fear up. The “Fear Gauge” today hit the highest level in history.
“Your success in investing will depend in part on your character and guts and in part on your ability to realize, at the height of ebullience and the depth of despair alike, that this too, shall pass.”
Wise words from Jack Bogle, the great investor and founder of Vanguard. In essence, do not be emotional.
Hope this is helpful.
Thank you for your continued trust and confidence. I remain vigilant as I manage and oversee your investment account.
John