Black Monday 1987

[bw5972]

I'm sure several forum members remember October 19, 1987, aka Black Monday.

I was 22 years old and had just invested my life's savings into two different mutual funds on Thursday, October 15th. $10,000 hard earned dollars were worth about $6,000 the next week. I didn't sell and actually kept buying as I could and stuck to it. It hurt, but calm heads won. The only saving grace for me was that the MN Twins won the World Series, something I thought I'd never get to see.

Just a friendly pointer to young investors on the forum, there are going to be corrections in your investment lifetime, take them in stride and stay the course. It really does work.

The BEST lesson I have ever gotten on investing. I was 3 years into my first j*b and had started contributing to this new thing called a 401k in 1985. As I only had a small balance the damage was not too bad. But hearing all the news of doom and gloom forever then seeing full recovery in a couple of years hardened my resolve to ignore the naysayers and stay on track with my program. Served me well in 2000 and 2008.

 

[Texas Proud]

I was 23, and it was one week after I accepted a job in the Financial Industry, and one week before I started in the Financial Industry.

I spent a week listening to my boss trying to convince me to back out of my acceptance, glad I did not because moving into finance was the best thing I could have done for my FIRE potential.

I am surprised that they were trying to convince you to back out...

When I graduated from college it was a bad time (not Black Monday time).... there was one accounting firm who had more people accept than they wanted... but a good number... so they just informed some of them that they would not be working at the firm... I do not think they gave them anything either...

 

[ChiliPepr]

I am surprised that they were trying to convince you to back out...

When I graduated from college it was a bad time (not Black Monday time).... there was one accounting firm who had more people accept than they wanted... but a good number... so they just informed some of them that they would not be working at the firm... I do not think they gave them anything either...

The financial firm was not trying to get me to back out, the firm I had given my notice to was. They did not want to lose me and kept telling me "Look what just happened to the market, do you really want to work in that industry!"

 

[YVRRocketSurgery]

I was in high school at the time and was generally oblivious to investing and the conditions of the markets except that my math teacher was apparently quite the investor. We'd gladly listen some of his investment commentary as a means to avoid doing math. It all makes sense now but at the time, I was wondering what the heck he was talking about one day when he was explain the market goes down but you shouldn't panic and instead it's actually a great time to buy more.

IMO, he was a pretty horrible math teacher but I'm sure he did very well for himself based on his investment principles.

 

[Texas Proud]

The financial firm was not trying to get me to back out, the firm I had given my notice to was. They did not want to lose me and kept telling me "Look what just happened to the market, do you really want to work in that industry!"

Ahhh, OK... makes sense now...

 

[kgtest]

I'm sure several forum members remember October 19, 1987, aka Black Monday.

I was 22 years old and had just invested my life's savings into two different mutual funds on Thursday, October 15th. $10,000 hard earned dollars were worth about $6,000 the next week. I didn't sell and actually kept buying as I could and stuck to it. It hurt, but calm heads won. The only saving grace for me was that the MN Twins won the World Series, something I thought I'd never get to see.

Just a friendly pointer to young investors on the forum, there are going to be corrections in your investment lifetime, take them in stride and stay the course. It really does work.

Homer Hanky baby! Still have it, I was 6. But my father sure was pi%%ing and moaning.

 

[Nature Lover]

I remember it well. Helping my parents move; and in the van we hear the news of the "crash" that Monday ~noon (here in CA). My dad and I pretty much shrugged. When it came to investments, he was pretty level headed. Figured by the time he heard about it, the worst was probably over. I was early in the accumulation stages of my career, so I didn't have much to lose. Just stayed with my plan of accumulating shares every payday.

Looking back at charts today, that "crash" just looks like a small dip.

 

[bw5972]

...Looking back at charts today, that "crash" just looks like a small dip.

That is the key point. Looking back at almost all the crashes, they were small dips in the overall scheme of things. (1929 the exception)

 

[Mulligan]

I remember stories of people trying to sell but couldn't get through to their brokers by phone. Some got through but brokers were unable to execute the orders esp for individual investors. It could have been a bigger drop. In the long run it was better to ride it out. I had a tiny brokerage account and a small 401k. I think we could only make changes to the 401k on the 15th and last day of the month.

I read an interesting story a couple years ago about the 87 crash. Seems some of the big boys were facing margin calls and liquidating anything they could get their hands on to sell. This guys broker called him to let him know some old illiquid railroad preferreds came available at fire sale prices. So he bought them. Still had them after 25 years at about 16% per year divi...

 

[iloveyoga]

I was 28 at the time and I worked in the pension business. I remember sitting at my desk hearing the news all day long about the Stocks sliding. We were told at the time that the companies were still the same companies they were the day before and they had not lost that much of their value over one day. We just kept right on working that day and our clients at the time did not panic. But these were big pension funds.

 

[racy]

I went to a broker and bought 1 share of Berkshire Hathaway. As I recall, about $3200.

 

[Jeffman52]

I was 26 and had started my first megacorp position. That year I got into my 401K (after learning what those were). The megacorp I was with had rocking stocks so I sunk 95% of everything into that. A few years go by and man, A few splits have gone by and my 401K is rocking. My (relatively small) 401K investments had turned into over 100K.

Then one morning, I logged in to see how it was going and I noted a lock on my account. You couldn't change anything on the account. And then the big lesson on having so much in your employers stock in investments. They had been reporting inaccurate financials in order to artificially inflate their stock prices. Overnight, my 100+K dollars turned into about 9K. It never recovered. I kept those shares for a number of years and finally moved it to something that was actually increasing its value. A decade or so later they got bought out by one of the competitors.

 

[sengsational]

I had worked for a megacorp, gone back to grad school, and just started work again when this event occurred.

The company offered, and I participated in an investment plan, but I was in the conservative option, so lost nothing.

If I knew what I know now, I would have been in 100% equities and "lost my shirt" only to get two shirts a year later.