Precedent for the ‘Unprecedented’

There’s Precedent for “Unprecedented”

While the Novel Coronavirus Pandemic (Covid-19) certainly feels unprecedented to us as we experience the unexpected tribulations of social isolation – or possibly the frustration of attempting to work from home with loved ones clamouring for attention – there have been a number of other unprecedented events that have impacted the markets throughout recent history.

These have included various pandemics; WWII breaking out in 1939; the assassination of JFK in 1963; the Cold War, culminating with the fall of the Berlin Wall in 1989 (with kids, inexplicably, being taught to hide under a desk in the event of a nuclear attack); and of course the events of September 11, 2001. In each case, from within the tumult it felt as though there would never be a return to stability.

It’s true that no one has a template for how this virus is going to play out. This may well be a moment in our collective history that we can point to and say that many things we’d taken for granted suddenly changed forever, much as the events of September 11, 2001 have changed how we travel. Regardless of adjustments in the way we live (we all know how to wash our hands like a surgeon, now) stability will, in fact return – as it always has. And, with it, the market will resume its climb.

Honestly, we hope the biggest worry in your day is coming to a consensus on a series to binge, but in case you’re curious – check out the market growth that’s occurred since 1928, just before the Great Depression.

Growth of $100 invested in 1928 = $34,000 in 2019 (inflation adjusted)[1]

[1] Data from Aswath Damodaran. S&P 500 total returns (Real).