The end of the year is fast approaching, and there is a general feeling of apprehension as investors wonder how much further markets can fall, and whether now is a good time to buy or get out.
It’s a sad reality that nobody has consistently and accurately been able to forecast the right time to enter or leave the stock market.
However, given that investment in property or shares is a long-term commitment, it may be worthwhile to think back on the last hundred years and ask yourself, “Was there ever a good time to invest in the stock market?”
1919 – Post-WWI hyper-inflation
1920 – Global recession
1921 – AU dollar deflation after post-war hyperinflation
1922 – Italy invaded Libya – Mussolini took Rome
1923 – German mark hyperinflation – France invaded Germany
1924 – Hitler released from gaol to rebuild his party
1925 – Australian debt default feared
1926 – US interest-rate cuts fuelled boom
1927 – US rate cuts rates and quantitative easing fuelled stock market bubble
1928 – Collapse in global commodities prices
1929 – October stock market crash
1930 – US Smoot-Hawley Tariff Act started tariff war – share prices collapsed further
1931 – Global collapse in production, jobs – Australia defaulted on debts
1932 – Australian shares rose – US shares fell further
1933 – Hitler became German Chancellor and won German election
1934 – US dust storms, US dollar devalued 41% – Hitler became Fuhrer
1935 – Hitler built up war machine – Italy invaded Ethiopia
1936 – Spanish Civil War – Australian import restrictions and military build-up
1937 – Recession due to tax hikes and spending cuts
1938 – War clouds gathered – Hitler incorporated Australia into the German Reich
1939 – War began in Europe
1940 – WWII continued – France fell
1941 – WWII continued – Pearl Harbour
1942 – WWII continued – Japan bombed northern Australia and Sydney harbour
1943 – WWII continued – Industry mobilised for war effort
1944 – WWII continued – consumer goods shortages – Soviets defeated German attack
1945 – WWII ended – post-war recession predicted
1946 – Dow Jones Industrial Average tops 200, market too high
1947 – Cold War began
1948 – Berlin Blockade
1949 – Sterling crisis – IMF emergency loan for Australia
1950 – Korean War
1951 – 25% inflation in Australia – stock market collapsed
1952 – 15% inflation in Australia – stock market fell heavily
1953 – Russia exploded H-Bomb
1954 – Dow topped 300 – up 44% – market too high
1955 – US President Eisenhower ill
1956 – Suez Crisis
1957 – Russia launched Sputnik
1958 – Recession – disastrous ‘Great Leap Forward’ in China
1959 – Castro seized power in Cuba
1960 – Severe credit squeeze and tax hikes in Australia
1961 – US ‘Bay of Pigs’ invasion of Cuba (failed)
1962 – Cuban Missile Crisis
1963 – US President Kennedy assassinated
1964 – Indonesia-Malaysia war
1965 – US started air raids and ground forces in Vietnam War
1966 – Australia followed US into Vietnam War
1967 – US Newark race riots – Israel/US invaded Jordan, Egypt & Syria in ‘6 day war’
1968 – US effectively off gold standard
1969 – Money tightened to fight inflation – US stock markets fell
1970 – Mining shares crashed in Australia
1971 – Nixon abandoned gold standard – Wage Price Freeze
1972 – Largest US trade deficit ever
1973 – US dollar devalued
1974 – Australian interest rates above 20% – steepest stock market fall in 40 years
1975 – Vietnam War ended – Clouded economic prospects
1976 – Economic recovery slowed – Britain bailed-out by IMF
1977 – US interest rate rises – US stock market slumped
1978 – US interest-rate rises – US dollar collapsed
1979 – Oil prices skyrocketed
1980 – Interest rates at all-time high
1981 – US interest-rate rises – steep recession began in US
1982 – Worst recession in 40 years
1983 – Stock market hit new highs – Latin-American debt crisis
1984 – Record US deficits – 4 US rate rise – Australian cash rates above 15%
1985 – Economic growth slowed – Plaza Accord deal forced down US dollar
1986 – Dow neared 2000 – ‘Banana Republic’ crisis in Australia – AU dollar collapsed
1987 – Record-setting stock market decline – October 1987 stock market crash
1988 – Election year – Rate hikes rises resumed in Australia and US
1989 – October stock market mini-crash
1990 – Estate Mortgage, Pyramid, Trico, SBSA all collapsed
1991 – US attacked Iraq – USSR General Secretary Gorbachev sacked
1992 – Global recession – Sterling crisis
1993 – Health care reform – Metallgeselschaft oil futures trading losses
1994 – 6 US interest rates rises – US bond crisis
1995 – Dow topped 5000 – Oklahoma bombing – Russian bank panic
1996 – Dow topped 6000 – Australian Treasurer Costello slapped tax surcharges on compulsory superannuation
1997 – Asian currency crisis
1998 – Russian default crisis – LTCM collapsed (US)
1999 – NASDAQ High Tech Index doubled in a year
2000 – Tech stocks crash
2001 – 9/11 attacks on World Trade Centre and Pentagon
2002 – US ‘War on Terror’ expanded into Bush’s ‘Axis of Evil’
2003 – US/UK invasion of Iraq
2004 – US interest rate rises
2005 – Seven more US interest rate rises
2006 – Rising inflation and interest rates across the world
2007 – Sub-prime losses and bankruptcies started in US – share prices peaked globally
2008 – US sub-prime crisis becomes global banking crisis
2009 – Deepest global recession since 1930s Depression
2010 – European banking crisis – Greek debt crisis – ‘flash crash’
2011 – Japanese tsunami and nuclear crisis – US credit-downgrade crisis
2012 – Greek debt ‘haircut’ – Central banks ramped up emergency quantitative easing
2013 – Rise of extremist political chaos in Europe – North Korea nuclear threat
2014 – Russia invaded and captured Crimea – negative interest rates in Europe
2015 – China slowdown crisis – global commodities collapse – US rate rises began
2016 – Brexit vote in Britain, Trump elected in US
2017 – US President Trump cut taxes and initiated government cuts + spending spree – three more US rate rises
2018 – US President Trump started trade wars