The chart above shows you Black Monday, which occurred on October 10, 1987, in context of the entire 1987 year.
The stock market had a .26% return that year, barely in positive territory.
Some Investors Did Not Lose A Penny Throughout Black Monday
You can see on the chart above that the stock market went up steadily, dropped drastically on Black Monday, and then began to climb back from its low point before the year was over. This means if you invested on the first trading day of the year, January 2, and remained invested throughout Black Monday all the way to December 31, you did not lose a single penny.
Some Investors Panicked And Lost Money On Black Monday
If you invested just prior to Black Monday, on October 1, 1987, by year end your investments were down 17%. If you panicked just after Black Monday and bailed out of the stock market, you locked in your losses, and missed the following market recovery.
Some Investors Recognized The Opportunity In Black Monday
Smart investors, who invest the way they shop, waiting for great sales and discounts, recognized the opportunity to invest at a discount, and bought stocks just after Black Monday, realizing very attractive returns as the market recovered over the subsequent years.
If you bailed out of the stock market in 1987, you missed the next few great years. As you’ll see on the next page, those who stayed invested watched their accounts steadily grow in value.
