The recent credit crunch, financial meltdown, and congressional inaction are unprecedented in market history.
Or are they?
We’ve never seen anything quite like this, and yet, market history is littered with “unprecedented” events.
Here’s a list of some events that have caused short-term volatility (and in some cases panic) in the markets:
- The Cuban Missile Crisis (1962)
- Arab oil embargo (early 1970’s)
- Wage and price controls (1971-1974)
- Nixon’s Resignation (1974)
- Sky-high interest rates and inflation (early 80’s)
- Stock Market Crash of 1987
- The S&L Bailout (1989)
- Foreign Currency Crises (1994-1998)
In the aftermath of all of these events (and too many others to name), the markets swiftly and decisively rewarded those who stuck with a diversified and deliberate strategy and ruthlessly punished those who threw in the towel.
Burn this series of events into your memory. Buy today’s newspaper and save the headline. Keep a journal of your daily emotions as this saga unfolds. The memory of events like these will make you a much better investor if you seize the opportunity to learn its lessons.
