The most important lesson Covid taught us about the stock market:
In the middle of the scariest headlines of our lifetime, the market didn’t just survive - it came back violently and finished much higher.
Here is what actually happened in 2020:
S&P 500 (large-cap US stocks)
Fell about 34% from its record high on 19 Feb 2020 to the pandemic low on 23 March 2020.
Then rallied to finish 2020 up around 16% for the year, closing near 3,756 on 31 December 2020.
From the March low to year end, that is roughly a 68% rebound.
Nasdaq 100 (big tech / growth names)
Dropped about 28% from 19 Feb 2020 to its March 2020 low during the Covid panic.
Then finished 2020 up about 47.6% for the year - one of its strongest years ever.
From the bottom to the end of 2020, the index more than doubled in value.
All of this happened while:
Global GDP was collapsing
Unemployment spiked
News headlines were almost 100% negative
The lesson for me:
Markets can fall far faster than most people expect.
But they can also recover and make new highs long before the news “feels” positive again.
If your only strategy is to panic-sell when headlines are scary, you risk missing the strongest part of the recovery - the exact move that can change your long-term results.
This doesn’t mean “buy every dip blindly” and it’s not a guarantee that every crash will bounce the same way, but most do.
For me, Covid was a brutal reminder that:
Price moves first. The narrative catches up later.
Staying disciplined, diversified and time-in-the-market focused has been far more powerful than trying to outguess every crisis headline.
$SPX500$NSDQ100... Show More
Excellent analogy.. I agree with what you said.. out of interest though.. do you mind me asking what you feel the market will do when we start reaching hi's again?.. (do you think it'll be a case of over-a valuation?.. or do you think it'll just be a case of growth?.. (I plan to start trading... Show More
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