Source: National Bank Advisor Distribution
Date Authored: August 8, 2008
At times like this, that is, times of declining stock markets prompted by an economic downturn and/or recession, the media play a significant role in creating fear in the minds of investors. Unfortunately, they are so successful at doing this that many investors are driven to make the wrong investment decisions (i.e. to invest more conservatively or to not invest at all until “things get better”). To highlight this fact, I went to the TIME magazine website and looked back 30 years for all the cover stories which illustrated worries (many of which warned of doom and gloom) about the economy or the stock market. I also looked at how much a $1,000 investment in the stock market*on the day the “doom and gloom”issue hit the stands, would be worth ten years later. I think you will find the results very interesting.
* To represent the stock market, I have chosen the Dow Jones Industrial Average which is one of the major indexes which aims to approximate the performance of the U.S. Stock Market
DOW JONES = 854.63
DOW JONES 10 years later = 1259.11
$1,000 invested in the Dow Jones on the day this issue hit the stands would have been worth $1,473 ten years later.
DOW JONES = 839.96
DOW JONES 10 years later = 1132.22
$1,000 invested in the Dow Jones on the day this issue hit the stands would have been worth $1,348 ten years later.
DOW JONES = 662.94
DOW JONES 10 years later = 1207.38
$1,000 invested in the Dow Jones on the day this issue hit the stands would have been worth $1,821 ten years later.
(almost doubling in 10 years)
DOW JONES = 579.94
DOW JONES 10 years later = 1163.21
$1,000 invested in the Dow Jones on the day this issue hit the stands would have been worth $2,006 ten years later.
(more than doubling in 10 years)
DOW JONES = 692.66
DOW JONES 10 years later = 1276.06
$1,000 invested in the Dow Jones on the day this issue hit the stands would have been worth $1,842 ten years later.
(almost doubling in 10 years)
DOW JONES = 772.44
DOW JONES 10 years later = 1958.22
$1,000 invested in the Dow Jones on the day this issue hit the stands would have been worth $2,535 ten years later.
(more than doubling in 10 years)
DOW JONES = 839.05
DOW JONES 10 years later = 2129.45
$1,000 invested in the Dow Jones on the day this issue hit the stands would have been worth $2,538 ten years later.
(more than doubling in 10 years)
DOW JONES = 834.04
DOW JONES 10 years later = 2440.06
$1,000 invested in the Dow Jones on the day this issue hit the stands would have been worth $2,926 ten years later.
(almost tripling in 10 years)
DOW JONES = 852.99
DOW JONES 10 years later = 2487.86
$1,000 invested in the Dow Jones on the day this issue hit the stands would have been worth $2,917 ten years later.
(almost tripling in 10 years)
DOW JONES = 885.41
DOW JONES 10 years later = 2732.36
$1,000 invested in the Dow Jones on the day this issue hit the stands would have been worth $3,086 ten years later.
(more than tripling in 10 years)
DOW JONES = 809.13
DOW JONES 10 years later = 2689.14
$1,000 invested in the Dow Jones on the day this issue hit the stands would have been worth $3,326 ten years later.
(more than tripling in 10 years)
DOW JONES = 977.99
DOW JONES 10 years later = 2909.90
$1,000 invested in the Dow Jones on the day this issue hit the stands would have been worth $2,975 ten years later.
(almost tripling in 10 years)
DOW JONES = 833.43
DOW JONES 10 years later = 3225.40
$1,000 invested in the Dow Jones on the day this issue hit the stands would have been worth $3,870 ten years later.
(almost quadrupling in 10 years)
DOW JONES = 860.92
DOW JONES 10 years later = 3369.41
$1,000 invested in the Dow Jones on the day this issue hit the stands would have been worth $3,914 ten years later.
(almost quadrupling in 10 years)
DOW JONES = 1165.20
DOW JONES 10 years later = 3832.30
$1,000 invested in the Dow Jones on the day this issue hit the stands would have been worth $3,229 ten years later.
(more than tripling in 10 years)
DOW JONES = 1182.42
DOW JONES 10 years later = 3745.62
$1,000 invested in the Dow Jones on the day this issue hit the stands would have been worth $3,168 ten years later.
(more than tripling in 10 years)
DOW JONES = 1805.31
DOW JONES 10 years later = 5532.59
$1,000 invested in the Dow Jones on the day this issue hit the stands would have been worth $3,065 ten years later.
(more than tripling in 10 years)
DOW JONES = 1892.29
DOW JONES 10 years later = 6219.82
$1,000 invested in the Dow Jones on the day this issue hit the stands would have been worth $3,287 ten years later.
(more than tripling in 10 years)
DOW JONES = 2014.09
DOW JONES 10 years later = 7442.08
$1,000 invested in the Dow Jones on the day this issue hit the stands would have been worth $3,695 ten years later
(more than tripling in 10 years)
DOW JONES = 2545.05
DOW JONES 10 years later = 10707.60
$1,000 invested in the Dow Jones on the day this issue hit the stands would have been worth $4,207 ten years later.
(more than quadrupling in 10 years)
DOW JONES = 3185.60
DOW JONES 10 years later = 9987.53
$1,000 invested in the Dow Jones on the day this issue hit the stands would have been worth $3,135 ten years later.
(more than tripling in 10 years)
DOW JONES = 3276.26
DOW JONES 10 years later = 7701.45
$1,000 invested in the Dow Jones on the day this issue hit the stands would have been worth $2,351
(more than doubling in 10 years)
DOW JONES = 7945.35
DOW JONES 10 years later = ???
DOW JONES on Aug 8th 2008 = 11,734
DOW JONES = 10621.35
DOW JONES 10 years later = ???
DOW JONES on Aug 8th 2008 = 11,734
DOW JONES = 9687.53
DOW JONES 10 years later = ???
DOW JONES on Aug 8th 2008 = 11,734
DOW JONES = 8920.70
DOW JONES 10 years later = ???
DOW JONES on Aug 8th 2008 = 11,734
DOW JONES = 12479.63
DOW JONES 10 years later = ???
DOW JONES on Aug 8th 2008 = 11,734
SUMMARY
On average, had you invested $1,000 on the day these issues hit the stand, the investment would have been worth $2,850 ten years later (almost tripling in that time)
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