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  • Writer's picture Treavor Dodsworth CFP®, CPA, CKA®

#37 - Historical Market Downturns


Historical Market Downturns

Sometimes it feels like the media is flipping a coin to determine if they share a doomsday article or an article touting the next positive market run. While I don't pay too much attention to mainstream media's prediction of where we are going, I do find it interesting to compare historical downturns. The below chart is data taken from Portfolio Visualizer. Please review their website for all applicable disclosures and a description of the asset classes. The data below is from a portfolio composed of the following asset classes:

45% - US Stock Market

35% - Global ex-US Stock Market

20% - Total US Bond Market


You can locate our current pullback as #4 in the chart. A couple interesting takeaways:

  1. There have been much more severe drawdowns for this portfolio and the portfolio eventually recovered.

  2. The longest underwater period for this portfolio was a little less than 5 years (Dotcom Crash that started in 2000).

The disclaimer you see on about every financial investment product “Past performance does not guarantee future result” would definitely be applicable here. Each drawdown is different in its own way and has its own challenges that must be overcome. That said, I find the data interesting and think it is helpful to know from a purely market return perspective- we have been here before.

 

Interesting Article(s) or Video(s)


  • This headline stuck out to me personally. I have been wondering about the broader implications of these stimulus bills. This is just one perspective with several interesting charts.

 

Thank you for reading! Were you investing in 2000 or 2008? How does this pullback compare for you personally?

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