How Does The Dow Jones Industrial Average Perform After Recessions?
What happened to the Dow during recessions – and the year after recessions. |
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Gloom, stress, disappointment, and investment despair during January doesn’t always predict what happens the rest of the year. For example, Dow Industrial Average returns during the 5 worst Januarys since 1926 led to an average positive investment gain of 12.3% over 12 months and 26% over 24 months. |
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Dates |
Dow returns during recession: |
Dow one year after: |
Comments |
August 1929 to March 1933 |
-84.20% |
81.07% |
The winter of 1933 was hard and cruel, but the spring of 1933 brought a warmer and recovering economic climate. |
May 1937 to
|
-23.18 |
-2.43 |
Wall Street pit traders were busy with buy and sell orders. Wall Street remained open and active despite the downturn. |
February 1945 to October 1945 |
21.33% |
-9.35% |
Hiroshima ended World War II. Even though the war ended, the U.S. economy remained in a recession, but the stock market kept going up. |
November 1948 to October 1949 |
-0.12% |
18.71% |
The death of President Roosevelt (“FDR”) shocked Americans. President Harry S. Truman became president in the middle of another economic downturn. |
July 1953 to
|
21.57% |
29.73% |
Civil strife disrupted the United States during the early 1950s. Despite civil unrest, U.S. workers became hopeful and industrious in a post-war economy and society. |
August 1957 to April 1958 |
-9.95% |
36.83% |
Russia’s Sputnik launch in 1957, challenged U.S. economic lethargy to compete internationally and in space. |
April 1960 to February 1961 |
7.48% |
6.94% |
When a new president takes office, the economy became inspired to get out of yet another recession. |
December 1969 to November 1970 |
-1.36% |
4.69% |
Business cycles are not unique in any economy. China’s Cultural Revolution against capitalism was the first of many steps toward an economic model. |
November 1973 to March 1975 |
-19.04% |
30.11% |
The political chicanery called “Watergate” distracted the country until the U.S pulled troops out of Vietnam. |
January 1980 to July 1980 |
11.51% |
1.92% |
Reagan’s “Morning in America” theme encouraged investors despite the national recession recession. |
July 1981 to November 1982 |
7.40% |
22.78% |
War in the middle east and a recession at home did not keep some industry groups from positive performance during a difficult economic down turn and a difficult recession. |
July 1990 to March 1991 |
1.15% |
11.04% |
The first Gulf War did not prevent a flagging economy when Bill Clinton was elected president. |
March 2001 to November 2001 |
-5.73% |
-9.70% |
$92 million tax rebate checks over 10 weeks were part of the Bush recovery plan. Markets continued to decline. |
Source: BusinessWeek |
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