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Can the Federal Reserve Save the Day?
There has been a peak in the stock market, and now it is falling.
By March 10, 2025, the Dow Jones Industrial Average had fallen 3,101 points, or 6.9%, from its December 4, 2024 peak of 45,014 to its March 10, 2025 low of 41,911.
In less than a month, the S&P 500 Index fell 516 points, or 8.4 percent, from its February 18 and March 10, 2025, peaks of 6,130 and 5,614 points, respectively.
Technically a market “correction” (defined as a 10% or more loss from a previous peak), the NASDAQ Composite Index had a high of 20,174 on December 16, 2024, and a low of 17,468 on March 7, 2025, a decline of 2,706 points, or 13.4%.
No complete collapse or market panic has been caused by any of those index performances. Because stock market indices are so unpredictable, they might have already begun to recover to some extent by the time you see this.
Descendants still descend. To determine the next move of the markets, we must investigate the causes of this and apply our predictive analytical tools.
Economic collapse equals profits
While a 20% drop in value in a single day (on October 19, 1987) or a 30% drop in value in a single month (in March 2020) are certainly terrifying possibilities for investors, they are far from the worst-case scenario.
In just two trading days, about 60% of the losses from the 1987 crisis were recouped, and in less than two years, they were recouped in full. Full recovery of 2020 crash losses occurred in four months, the quickest recovery of any crash in the previous 150 years.
Following a market meltdown, purchasing stocks can prove to be an excellent investment.
Just so we are aware, not every accident has a happy ending. It took the stock market 25 years to recover from the 1929 catastrophe, which occurred in 1932. Resilience in the stock market following the dot-com catastrophe of 2000 took six years.
