Wed., July 8th, 2026
This was formerly posted to my Facebook page on 7/8/26, forgetting to place it here! It is still 100% relevant to today's investor. Knowing history can prepare you for the future.
Ninety-four years ago today, something noteworthy occurred in the stock market. It stopped declining! The 1929 stock market crash in October that year started a long slide in stock prices, chiefly due to the lax regulations on trading, and the ill-timed responses from the Government, under President Herbert Hoover.
But the "crash" of 1929 and the ensuing bear market was not over quickly; it lingered on into 1930,1931, and 1932. Franklin Roosevelt took over as President in 1933 after being elected in 1932. He championed various social and work programs to get America back on its feet. Unemployment hit 25%. The stock market fell 89% in 34 months, ending July 8, 1932 at Dow Jones 41.22.
Many investors were wiped out due to buying stocks with borrowed money, speculating, and unable to repay. But those who held on were rewarded as stocks rebounded almost 5 fold in the next 4-1/2 years to Dow Jones 194. It would be 1949 before Dow 200 would be broken on the upside again. Here's a snippet below from my 100-year wall chart below.
The market 'tripled' in the next 12 years, 1949-1961, before settling in for a 16 year consolidation or rest where it would not get below 600 or above 1,000 for long. That was 1966 -1982.
The stock market finally breached 1,000 decisively in late 1982, and never looked back from that level.
My father started managing money in early 1973, and I joined him in August, 1982 at Dow Jones 777.
2000-2009 was a also a zero gain period, followed by a very good historic run from 2010 to current day with a +335% gain, from Dow Jones 11,000 to 48,000 by the end of 2025. Just two years were losers; 2018 and 2022.
So what's the lesson from all this history. Well, expect bear markets, expect sideways markets and diversify into bonds and some gold and non-correlated investments. And exercise patience!
The stock market rises an 'average' of 10% per year, but as you can see, that path can be laden with set-backs along the way. Thanks for reading!
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