Market crashes have happened before and stocks tend to recover relatively quickly

From Nasdaq: 2025-04-12 10:05:00

The stock market has experienced significant crashes, with the most recent happening in March 2020 due to the COVID-19 pandemic. Despite the steep declines, history shows that markets can recover relatively quickly with the help of actions like the Federal Reserve’s quantitative easing program. The market crash of 1929 led to the Great Depression, while Black Monday in 1987 saw a 22.6% drop in the Dow Jones. The current market crash, influenced by government tariffs, has left investors uncertain about the future, making it challenging to predict market behavior and make investment decisions.

Looking at past market crashes, it’s clear that stocks tend to bottom out in a few months, with a recovery to new highs taking longer. For investors, buying the dip during market downturns and dollar-cost averaging into ETFs like the Vanguard S&P 500 ETF could be effective strategies. While the market’s future remains uncertain due to government tariffs and policy changes, history suggests that gradual investing during market dips can optimize returns in the long run.



Read more at Nasdaq: History Says This Is What Comes Next After a Market Crash and When Stocks Might Recover