Stock market crises: history, types, and conclusions for investors

👆The fascinating table above tells us the story of major stock market crises throughout history👆

– like an economic thriller spanning almost 200 years! 🗺

Let's dive in and understand what it says – in a simple, engaging way, with some critical conclusions for investors: 💬

What do we see here? 🔭

The table surveys all major stock market crises since 1835, including:

- When they started and ended (Start / End) 🏁

- What was the percentage decline (Decline %) 🛍

- How long it took them to recover to the previous price (in nominal and real terms) 📈

And finally? A summary of averages that can change the way you look at market declines! ✨

The three types of crises:

The first - S – Structural: 🚩 Crises originating from deep systemic failures – imagine collapsing banks, bursting real estate bubbles, or a global recession. 🔴

Example: 1929 or 2008 crisis. Average decline: 57%, average recovery: 134 months (!!) – 11 years! 🚫

The second C – Cyclical: 🚨 Declines that occur as part of a natural economic cycle – temporary recession, change in interest rate policy, etc.

Example: 1987, 1973, 1990. Average decline: 31%. Recovery: 73 months ⚠️

The third – Event-Driven: Crises resulting from a one-time event – wars, pandemics, disasters. ⚠️

Example: Corona (2020), 9/11. Average decline: 27%, average recovery: only 12 months – a quick comeback! 🔼

What are the overall average numbers? Average crisis duration: 25 months. Average decline: 36% 🐻. Average recovery time: 54 months (4 - 5 years). 🪧

But this is an overall average.. 🤌

The average recovery from an event-driven crisis is 12 months, meaning only one year 👌

The current crisis – what's happening now?

The table also includes a new row: February 2025 – April 2025 (1 month) – a decline of only 17%. 📉

If this truly remains a short "Event-Driven" situation, it could be a good sign for a quick market comeback. 📤

What's the big conclusion? 📣 Don't panic about crises – they are a natural part of the market, and history shows that all of them, without exception, ended in recovery. 📈

Time is the most powerful weapon of the patient investor – even the deepest crises, like that of 1929, did not stop the market from eventually rising. 🛒

Examine the type of crisis – if it looks like a one-time event, it might already be behind us; if it's structural – more patience will be required. 🤌

✨ One final thought:

The market may fall – but history shows it always recovers. 📈

The true winners are those who do not succumb to fear. 🛒