Family Update
My son, Chris, is considering becoming an electrician. We recently met with an electrician at Aqua Plumbing and Air, and it looks like he will be doing an internship there. We learned that there is a shortage of 75,000 electricians in the U.S., so he shouldn't have a hard time finding a job.
In addition to the piano, Chris has also taken up the drums. This isn't great for Momma's migraines, but fortunately, there are now fancy electronic drums that make limited noise, and he can use headphones to hear everything.
Speaking of my wife, she is traveling to Chicago for more Botox treatments next week. It's supposed to be 7 degrees there, and she has never worn long johns before, so she needs to buy some.
Senay had an amazing weekend in Las Vegas, where she participated in a competitive pickleball tournament. We're thrilled to share that she secured an impressive 2nd place and took home $300 in prize money!
Did you know that most "normal" investors actually lost way less money during market crashes than the media wants you to believe?
Yep. Turns out, the financial doom-and-gloom headlines have been exaggerating things for years. Big shock, right?
I’ve been digging through history, and I’ve uncovered something surprising. We all hear the horror stories about people losing everything in past crashes. Maybe you’ve even had that nagging fear—one bad market dip, and suddenly, you’re living in a cardboard box.
But let’s take a deep breath and look at the facts.
The Five Big Market Crashes of the Last 100 Years
The Great Depression (1929)
World War II (1939)
Oil Embargo/Nixon Resignation (1973)
The Dot-Com Bubble (2000)
The Great Recession/Real Estate Bubble (2008)
Here’s the first surprise: there were long periods when markets just… went up. No major crashes, no chaos—just steady growth.
And here’s the second surprise: even when markets did crash, they didn’t stay down forever.
Crashes Are Short-Term. Investing Is Long-Term
Let’s break this down with an analogy. Imagine you threw all your money into the market in the worst possible years—1929, 1940, 1973, 2000, or 2008. You’d have had a rough time—no doubt about it.
But in real life, nobody invests that way. You don’t take a lifetime of savings and dump it all in at once. Investing is a slow, steady process over years or decades.
To truly understand how damaging (or not) these crashes were, we have to look at what happened in the years before and after.
The Great Depression: A Disaster… or Not?
Let’s say you had $100,000 invested in 1925. Here’s what happened in the years leading up to the crash:
1926: +11.6%
1927: +37.5%
1928: +43.6%
When the market crashed, your $100,000 had already grown to $220,000. Yes, the market tanked; by 1932, your balance fell to $80,000. But guess what? The market rebounded. By 1936, your investment was worth $241,000.
So even after the worst economic collapse in history, your money still more than doubled over a decade.
World War II: More Than Just a Crash
The WWII-era crash looked ugly, too. But you still came out ahead if you invested $100,000 in 1935 and held steady through 1945 (despite major drops in 1937, 1940, and 1941).
How? Because the market had huge positive years:
1936: +34%
1938: +31%
1942: +20%
1943: +26%
1944: +20%
1945: +36%
A few bad years? Sure. But by 1945, your $100,000 had turned into $242,000.
The 1973-74 Crash: Not So Bad After All
Markets dropped 40% during the oil embargo crisis. Sounds scary, right? But if you invested $100,000 from 1970 to 1980, you still ended up with $170,000.
The Dot-Com Bubble: A Wild Ride, But Still a Win
The 1990s were one of the best decades in stock market history. If you invested $100,000 at the start of the decade, you had $530,000 by the time the bubble burst.
Did the market drop 40% from 2000 to 2002? Yep. But even after that, you were still way ahead.
The 2008 Crash: The One We Remember Best
The Great Recession felt like the end of the world. Markets dropped 37% in 2008 alone. But what about the years before and after?
If you invested $100,000 in 2005, you rode through the crash, stuck with it, and today that money would be worth $485,000.
So, What’s the Lesson Here?
Stock market crashes don’t happen in a vacuum. They’re part of a long-term cycle, with big gains before and after. The real mistake isn’t the crash—it’s panicking and selling at the bottom.
So, what should you do when the next crash comes?
Nothing.
Keep calm, stay invested, and let time do the heavy lifting.
Be blessed,
Dave