The Great Crash — October 1929
The worst bear market in history
The S&P 500 fell 86% from peak (September 1929) to trough (June 1932). The full recovery took 25 years (1954). This remains the only US bear market where a 20-year holding period produced a negative real return.
What history says
Editorial commentary written by ALAN analysts. Figures cited below are analyst-authored context — they are not derived from the chart above and may reflect different windows or sources.
An investor at the 1929 peak needed 25 years to break even nominally. Adjusted for deflation (which was severe in 1930-33), real recovery came sooner — about 15 years.
The Fed tightened INTO the crash (raising rates in 1931), Congress passed Smoot-Hawley tariffs, and bank failures were allowed to cascade. Modern policy frameworks exist specifically to prevent this sequence.
FDIC deposit insurance, the Fed's lender-of-last-resort function, and automatic fiscal stabilizers did not exist in 1929. The institutional framework is fundamentally different.
History's one true exception is the stress test a plan must survive rather than the outcome to expect: 1929 punished even patient investors, and what it punished most was leverage and the absence of bonds or cash to live on while equities slowly repaired.