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The Last Time the Market Was This Low…
By JLP | March 2, 2009
The Dow Jones Industrial Average closed today at 6763.29. The last time the Dow was this low…
• It was April 28, 1997—nearly 12 years ago (that was an intra-day low).
• My youngest son was about 2 months old.
• My oldest son was a year and a half old.
• My daughter was NEGATIVE five years old.
• We lived in an apartment. We were still two years from buying our house.
• We were driving an 88 Buick Skyhawk and a 95 Ford Contour.
• I was working for PaineWebber and studying for the Series 7.
• Clinton was president.
Topics: Investing | 8 Comments »
March 2nd, 2009 at 9:23 pm
man… if I had extra money I’d be investing heavily in index funds right now…
March 2nd, 2009 at 10:46 pm
You’re right Tom. While it of course could still drop more, I think that the price is pretty sweet. While I hear all these fear inducing stories about how every bit of wealth has been wiped out for anyone investing since 1997, my view is that people who have been investing over the last 10 years probably have money to continue investing now. Those who have been spending more than they earn over the last 10 years are scrambling and tightening their belts just to survive. I’m so glad for my education by both my schools and my parents, and a little fool.com back when I first got out of school.
AFM, in 1997, I was still in school and driving a (hand-me-down) Buick as well. 2 1/2 years from buying the house I still live in today!
March 2nd, 2009 at 10:46 pm
PS – Tom because of today’s events and reading your comment, I decided to bump a little more into my investments today.
March 3rd, 2009 at 1:16 am
I was in Europe, in High School.
When I think thats it, its the end there is some bad news and markets drop to new lows.
Index funds probably a good idea to get in if you have enough time.
March 3rd, 2009 at 7:55 am
Its in vogue to forecast doom and gloom. Thanks for your perspective.
Keep ‘em comin!
March 3rd, 2009 at 12:53 pm
This market does seem oversold. Although according to Robert Schiller, the S&P 500 would have to fall a further 35% from here, to 460, to test the lows in previous extreme contractions of the market, so let’s not all jump in just yet.
March 3rd, 2009 at 3:46 pm
To put people more into the frame of reference of April 28, 1997:
• We were talking about the English Patient winning Best Picture at the 69th Academy Awards, hosted by Billy Crystal.
• Many of us were talking about the Hale-Bopp coment. Not becuase it was especially interesting, but because of the Heaven’s Gate mass suicide.
• Houston socialite Doris Angleton was found murdered in her home earlier that same month.
Among the things that hadn’t happened by April 28, 1997:
• Tony Blair wouldn’t be appointed UK Prime Minister until the following month.
• IBM’s Deep Blue hadn’t beaten Gary Kasparov yet.
• Steve Jobs hadn’t yet returned to Apple Computer yet.
• Princess Diana was still alive.
• Using the phrases “Florida Marlins” and “World Series Champions” in the same sentence would most likely result in laughter (The Florida Marlins would win the World Series later that year).
• The World Trade Center towers were still standing, and if you asked anybody what famous historical event happened on September 11, you were only challenging your friends with trivia.
On another note – I’ve been agressively looking into index funds. I imagine they’ll stay down for some time to come, but buying index funds now, along with some dollar cost averaging does seem to be a smart long-term play right now!
March 3rd, 2009 at 7:03 pm
Your post spurred me into action last night. I looked at putting $2500 into our savings acct (earning 1.85% at best; or in a local bank’s 7-month cd at 2.3%) but ended up buying more P&G in our drip. How many more bottles of Tide/Olay do I need to buy to see this stock move up again? C’mon people, do more laundry & protect your skin! I am surprised that the stock market didn’t increase today as I thought there’d be lots of motivated buyers… Still, I’m happy w/the decision as I bought in even lower. Still livin’ for the long-term!
And yes, I know…the market likely will go lower…
Next move will be to buy more I-bonds…if I can stomach decreasing the E-fund. Not sure if I’m ready to do that yet.