The Weekly Wire: 14 Years On
Reflecting on the 14-year anniversary since the S&P 500 bottomed at 666 during the Great Recession in March 2009, the author, then an equity portfolio manager, highlights the personal and professional challenges faced during the 58% market decline from October 2007 to March 2009, and emphasizes the remarkable 505% total return and 13.7% average annual return of the S&P 500 since that low, underscoring the resilience of the US economy and stock market amid ongoing macroeconomic challenges.
An anniversary is an easy reason to look back on an event, a point in time – good or bad, happy or sad – that has given our life meaning. The event can be personal (a wedding) or professional (the first day at a new job). For the purposes of this week’s Weekly Wire, for me, I guess it is a bit of both.
I was working as an equity portfolio manager when the S&P 500 bottomed out during the Great Recession, so how the stock market was performing at the time had a meaningful impact on me professionally, and, as you might imagine, it had been a very stressful 18 months as the index moved from its October 2007 peak to its March 2009 trough. Navigating that period had a meaningful impact on me personally, as I learned a set of coping skills that enabled me to better focus on what I could control and compartmentalize the pressures and challenges that a severe bear market brings. And to dig a bit deeper into the bear market of 2007 to 2009 (setting aside the countertrend rally of late 2008 / early 2009), the S&P 500 peaked at 1,576 on October 12, 2007, and bottomed out at 666 on March 6, 2009, having given up approximately 58% of its value.
But, as we like to remind ourselves, markets go up much more than they go down, and the market sure has gone up since the S&P 500 hit 666 on March 6, 2009. More specifically, over the past 14 years, the S&P 500 has produced a total return of approximately 505% and an average annual return of 13.7% through today (I got to run those numbers on the same HP12C calculator I was using back in 2009, which was kind of neat). As we navigate a still very challenging macro and market environment, the resiliency of the US economy and the US stock market is something we all might want to keep in mind.