Crisis events and the Dow
Our country has faced numerous challenges and crises over the years. When events occur, your initial reaction may be to make changes to your portfolio. However, we believe it’s a mistake to change your investment strategy in reaction to crises. This table emphasizes the importance of maintaining a long-term perspective during times of crisis.
| Event | Reaction dates | Dow % change in days following the crisis* | |||||
|---|---|---|---|---|---|---|---|
| Start date | End date | Initial reaction | 22 days | 63 days | 126 days | 253 days | |
| Germany invades France | 05/09/1940 | 06/22/1940 | -17.1 | -0.5 | 8.4 | 7.0 | -5.2 |
| Pearl Harbor | 12/06/1941 | 12/10/1941 | -6.5 | 3.8 | -2.9 | -9.6 | 5.4 |
| Korean War | 06/23/1950 | 07/13/1950 | -12.0 | 9.1 | 15.3 | 19.2 | 26.3 |
| Eisenhower heart attack | 09/23/1955 | 09/26/1955 | -6.5 | 0.0 | 6.6 | 11.7 | 5.7 |
| Cuban missile crisis | 10/19/1962 | 10/27/1962 | 1.1 | 12.1 | 17.1 | 24.2 | 30.4 |
| JFK assassinated | 11/21/1963 | 11/22/1963 | -2.9 | 7.2 | 12.4 | 15.1 | 24.0 |
| U.S. bombs Cambodia | 04/29/1970 | 05/14/1970 | -7.1 | 0.4 | 3.8 | 13.5 | 36.7 |
| Kent State shootings | 05/01/1970 | 05/26/1970 | -14.0 | 9.9 | 20.3 | 20.7 | 43.7 |
| Arab oil embargo | 10/16/1973 | 12/05/1973 | -18.5 | 9.3 | 10.2 | 7.2 | -25.5 |
| Nixon resigns | 08/07/1974 | 08/29/1974 | -17.6 | -7.9 | -5.7 | 12.5 | 27.2 |
| U.S.S.R. invades Afghanistan | 12/24/1979 | 01/03/1980 | -2.2 | 6.7 | -4.0 | 6.8 | 21.0 |
| Falkland Islands War | 04/01/1982 | 05/07/1982 | 4.3 | -8.5 | -9.8 | 20.8 | 41.8 |
| U.S. invades Grenada | 10/24/1983 | 11/07/1983 | -2.7 | 3.9 | -2.8 | -3.2 | 2.4 |
| U.S. bombs Libya | 04/14/1986 | 04/21/1986 | 2.8 | -4.3 | -4.1 | -1.0 | 25.9 |
| Financial panic ’87 | 10/02/1987 | 10/19/1987 | -34.2 | 11.5 | 11.4 | 15.0 | 24.2 |
| Invasion of Panama | 12/15/1989 | 12/20/1989 | -1.9 | -2.7 | 0.3 | 8.0 | -2.2 |
| Gulf War | 01/16/1991 | 01/17/1991 | 4.6 | 11.8 | 14.3 | 15.0 | 24.5 |
| Gorbachev coup | 08/16/1991 | 08/19/1991 | -2.4 | 4.4 | 1.6 | 11.3 | 14.9 |
| World Trade Center bombing | 02/25/1993 | 02/27/1993 | -0.3 | 2.4 | 5.1 | 8.5 | 14.2 |
| Kobe earthquake (Japan) | 01/13/1995 | 01/16/1995 | 0.6 | 0.7 | 7.0 | 19.7 | 28.3 |
| Asian stock market crisis | 10/07/1997 | 10/27/1997 | -12.4 | 8.8 | 10.5 | 25.0 | 16.9 |
| Sept. 11 terror attacks | 09/10/2001 | 09/21/2001 | -14.3 | 13.4 | 21.2 | 24.8 | -6.7 |
| Iraq War | 03/19/2003 | 05/01/2003 | 2.3 | 5.5 | 9.2 | 15.6 | 22.0 |
| Indonesia/ Indian Ocean tsunami | 12/23/2004 | 12/27/2004 | -0.5 | -2.6 | -2.7 | -4.4 | 1.0 |
| Hurricane Katrina | 08/26/2005 | 08/29/2005 | 0.6 | 0.1 | 4.5 | 5.1 | 8.7 |
| India, Israel and Lebanon bombings | 07/11/2006 | 07/18/2006 | -3.0 | 5.0 | 10.9 | 16.4 | 28.3 |
| Bear Stearns collapse | 03/14/2008 | 03/14/2008 | 0.0 | 5.6 | 3.0 | -4.4 | -38.1 |
| Lehman Brothers collapse | 09/16/2008 | 09/16/2008 | 0.0 | -18.8 | -22.6 | -32.3 | -11.5 |
| Japanese earthquake (tsunami & nuclear fallout) | 03/11/2011 | 03/13/2011 | 0.5 | 2.8 | 0.7 | -6.2 | 7.6 |
| Boston Marathon bombing | 04/12/2013 | 04/15/2013 | -1.8 | 4.6 | 6.1 | 4.4 | 11.4 |
| Chinese market turmoil | 08/21/2015 | 08/25/2015 | -4.8 | 4.1 | 13.6 | 6.6 | 17.8 |
| U.K. votes to leave European Union | 06/23/2016 | 06/27/2016 | -4.8 | 7.7 | 5.6 | 16.3 | 25.2 |
| Recession fears on oil price shock | 10/10/2018 | 10/10/2018 | -3.1 | -1.0 | -11.3 | -0.8 | -1.0 |
| First confirmed Coronavirus case | 2/20/2020 | 3/23/2020 | -36.37 | 28.8 | 31.6 | 43.0 | 60.4 |
| Mean | -6.2% | 3.9% | 5.4% | 9.75% | 14.9% | ||
| Median | -2.8% | 4.3% | 5.9% | 11.5% | 17.4% | ||
| Sources: Ned Davis Research/Edward Jones. Copyright © 2019 Ned Davis Research, Inc. All rights reserved. Further distribution prohibited without prior permission. The 22-, 63-, 126- and 253-day rates of change are calculated from the second date in the Reaction dates column. The first date in the Reaction dates column indicates the start of the market reaction or the trading day prior to the event. 1914 data: In 1916, a new list of 20 stocks for the DJIA was adopted and computed back to the reopening of the exchange on 12/12/1914. NDR analysis for this study adjusted the DJIA index level prior to 12/12/1914 to reflect accurate and consistent data. Past performance is not a guarantee of future results. The Dow Jones Industrial Average is unmanaged and is not meant to depict an actual investment. | |||||||
