Black Thursday

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For investors, October has certainly been the scariest month of the year... especially in the stock market. Sitting with my wife last weekend, I realized what day it was and began to have some flashbacks. "Do you know what day it is?", I asked. She said Saturday. I said, "Yeah, but, what day of the month?". She said the 19th and, "Should that mean something to me?" "Guess not, but it means a lot to me," I said. "It's the anniversary of Black Monday - the Market Crash of 1987." That day 37 years ago was the biggest single day fall in the history of the U.S. stock market. I will never forget it.

Fast forward to today - another day in October and another anniversary of a stock market crash; October 24, 1929. It was the crash called Black Thursday. On Friday the 25th, the London Herald's front page headline read, "Wall Street Crash!" The accompanying article was titled, "Black Thursday in America: Stocks Plunge and Eleven Commit Suicide". The U.S. papers chose to keep that detail out of the headline's lead article.... Scary days, indeed. And it got worse after Black Thursday in 1929. October 24 was just the first day of the stock market crash of 1929. It was followed by "Black Monday" and "Black Tuesday" of the next week. After the country's major banks and investment companies bought large blocks of stocks, the market calmed down Friday. Then heavy selling resumed the following Monday the 28th and Tuesday the 29th, when prices declined by a further 12.8% and 12%, respectively.

The catastrophic decline in the stock market in the U.S immediately preceded the worldwide Great Depression. The "Great Crash" is still considered the worst one in history. Widespread panic and confusion sparked rioting on Wall Street. The "Roaring 20's" bull market had ended. The Dow Jones Industrial Average had reached a high of 381 points on September 3, 1929. After the crash, the market continued to decline, and by July 1932 the Dow had fallen to a low of 41—an 89% drop from its peak. The stock market didn't revisit the highs seen before Black Thursday until decades later, in November 1954.

Though the Great Crash that set off the Great Depression occurred in October, history also shows that October isn't such a scary month for the stock market after all. October is known as the "bear market killer" because many bear markets have ended in October and bull markets have started. More bear markets have ended and bull markets started in October than any other month. The most recent was 2022. Of the 12 post-WWII bear markets five have ended in October. Also, of the 12 bull markets since 1957, five have started in October. Again, the last one was October of 2022. So, happy 2nd birthday to the "AI driven bull market"!

John J. Gardner, CFP®, CPM®

3860 Blackhawk Rd, Ste. 160

Danville, Ca. 94506

888.985.PLAN (7526)

https://blackhawkwealthadvisors.com/

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