Pandemics and Market History
Can History help us make better decisions about the future?
As we mentioned in our last email update, “History repeats itself, or the very least it rhymes.” The brief history of Sir Isaac Newton is a direct example of this quote.
In 1665, the University of Cambridge temporarily closed due to fear of the Bubonic plague. Isaac Newton had to work from home, where he used that time to develop calculus and the theory of gravity. Upon his return, he told his professor, Isaac Barrow about his work, and Barrow eventually resigned his chair in favor of Newton. (http://www.edu.pe.ca/southernkings/newton.htm)
In addition to this peek back nearly 350 years ago, below you will see a chart back to 1980 of past impacts from a major epidemic/pandemic. The data displays a couple of noteworthy items:
1. The sheer number of outbreaks we have dealt with since 1980
2. The return on the S&P 500 6 months and 12 months after the bottom of the market. Nothing can be certain as we deal with the outbreak, but history shows we will get through these periods.
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**Content in this material is for general information only and not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly. No strategy assures success or protects against loss. Investing involves risk including loss of principal.**