Word: crashing
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Dates: during 1990-1999
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...also been a fabulous buying opportunity. But what made that Friday a death trap, the worst of all possible times to buy? Let's review that moment, because the question of buying or selling the next big dip, rather than the question of whether there could be another crash (answer: sure as shootin') can make us a big pile of money the next time around...
...decline as buyable. Any change in the course of interest rates, the personnel in charge of our economy or the broad participation of the majority of stocks would cause me to reconsider. Barring that, the next time I see a dip like that of Friday before the Crash of '87, I'll bet that waiting for a Black Monday to buy will be too late...
Patricia, do you remember--does anyone?--Oct. 19, 1987, that lose-your-lunch Monday 10 years ago this week when the Dow Jones industrial average plunged 23% and sent shrieks issuing from the canyons of Wall Street? A similar crash today would take the Dow from 8000 to 6160 in a single day. It would hack your mutual-fund balance from...
...turned out, the '87 carnage was quickly repaired and never did ripple in a way that would curb consumer spending and dampen the economy, as many feared might happen at the time. Just two years after the crash, the Dow was setting records again and the investing public had learned, rightly or wrongly, to buy when the market drops. The bigger the decline, the greater the opportunity. So goes the dogma of the day, and it is ironic that the greatest one-day plunge ever--the 1929 crash was a mere 12%--was the springboard for today's equity culture...
...here, so no one can be sure what to expect. When pushed, market veterans liken today's fervor to 1929 or 1968, both bull-market peaks. Because of key differences between now and those periods, however, few predict imminent disaster. But it's worth noting that after the '29 crash the S&P 500, excluding dividends, didn't fully recover for 25 years. And the '68 peak was part of a sideways market that lasted 18 years. Some believe a long dry spell like the one after the '68 bust, which included a 46% decline in the market...