CKBlog: The Market

Thursday, October 19, 2017

Black Monday

by Steve Haberstroh, Partner

Thirty years ago today, on October 19, 1987, the Dow Jones Industrial Average (DJIA) dropped by 22.6%, setting the record for the largest percentage one-day drop in its history. It will forever be known as “Black Monday.”

The DJIA closed at $2,246.73 on the last trading day prior to Black Monday’s crash. If you had invested $10,000 in the DJIA on that day, it would have been worth $7,760 one trading day later. How foolish!

But let’s say you were irresponsible enough to hold onto your investment over the next three decades. Yesterday, October 18, 2017, the DJIA closed at $23,157.60, which is more than TEN TIMES higher than your original purchase price of $2,246.73! 

Even more shameful, just imagine how silly it would have been to not only hold onto the investment but reinvest all dividends back into the DJIA? The value of the original $10,000 would be a whopping $212,866.00 as of yesterday. You’d have experienced a total return of 2,128.66%!

Below is a graphical representation of the DJIA’s ‘dark’ journey since Black Monday:

DJIA since Black Monday

Perhaps you weren’t so foolish after all. 

Time and patience are your most powerful investing tools. Stick to the game plan that works for you.