3 Things 12-1-25

Thing One

What The Last Three Major Market Crashes Teach Us About Long-Term Investing

Market history is full of declines, but only a few reach true “crash” status — deep, prolonged drawdowns that shake investor confidence and reset entire economic cycles. The last three such events all delivered peak-to-trough losses of 34% to 57%, each triggered by a different spark, each with a different recovery timeline, and each ultimately rewarding investors who stayed the course. Here’s what happened, why it happened, and what it means for the years ahead.

1. The COVID-19 Crash (2020)

The 2020 market collapse was one of the fastest in modern history. As COVID-19 spread across the globe, governments implemented immediate lockdowns, triggering extreme uncertainty around corporate earnings, supply chains, and consumer behavior. The S&P 500 fell approximately 34% in just over a month — the quickest drop from an all-time high ever recorded.

What followed was equally historic: an extraordinary fiscal and monetary response. The Federal Reserve cut rates to zero and launched massive quantitative easing, while governments deployed trillions in stimulus. This aggressive intervention helped the market recover its losses in roughly 141 days, or 4.5 months. From the March 2020 lows to today, the S&P 500 has generated around 143%, reflecting one of the strongest post-crash bull markets on record.

2. The Global Financial Crisis (2007–2009)

The Global Financial Crisis produced the deepest market decline since the Great Depression. The S&P 500 sank about 57% as the U.S. housing bubble burst, subprime mortgages unraveled, and highly leveraged financial institutions collapsed under the weight of toxic securities such as CDOs. The failure of Lehman Brothers triggered a global credit freeze, and the economy entered a severe recession.

Because this was a systemic crisis — with the plumbing of the financial system itself breaking — the recovery was slow and grinding. It took roughly 1,702 days (about 4.6 years) for the market to reclaim its pre-crisis highs. But investors who held through the storm were rewarded: from the March 2009 bottom to today, total returns exceed 700%, or about 11% annualized over 16 years.

3. The Dot-Com Bubble Burst (2000–2002)

At the start of the millennium, years of exuberance around internet and telecommunications companies inflated valuations far beyond sustainable levels. When reality set in — as many unprofitable tech firms failed — the S&P 500 fell roughly 47%. The downturn was amplified by a mild recession and the geopolitical shock of the September 11 attacks.

Recovery took time. It took about 1,515 days (just over 4 years) for the index to surpass its March 2000 highs, and the period from 2000–2007 is often remembered as a “lost decade” for price-only returns. Yet from the 2002 trough to today, long-term investors have again enjoyed 700%+ total returns, demonstrating that even sluggish recovery periods can be followed by powerful multi-decade compounding.

The Moral: Time Is the Investor’s Greatest Ally

Each crash had a different cause — a pandemic, a housing collapse, a tech bubble — but the lesson is the same: the market always recovers, and recovery rewards patience. The only real variable is time. Some rebounds take months, others take years, but historically, every major drawdown has eventually been followed by powerful long-term returns.

The investors who panicked and sold near the lows permanently locked in losses. The investors who stayed invested — or continued adding to their portfolios — saw their patience compound into multi-hundred-percent gains.

Volatility isn’t a flaw of the system. It is the system. And history is remarkably consistent: those who stay disciplined, diversified, and long-term oriented ultimately win.

Thing Two

It’s Health-Plan Season — Don’t Forget Your Life Insurance Plan Too

Every fall, millions of Americans spend time comparing deductibles, premiums, and provider networks as open enrollment rolls around. It’s the one time of year when we all stop and think seriously about our health coverage. But while we’re in that mindset, there’s another piece of financial protection that deserves space on the checklist — life insurance.

Most people don’t realize how wide the protection gap really is. Roughly 40% of Americans have no life insurance at all, and among those who do, nearly half are underinsured. Even more surprising: over 100 million U.S. adults say they need coverage or need more coverage. In other words, life insurance isn’t just something a few people overlook — it’s one of the biggest holes in America’s financial planning.

The good news? Filling that gap is much easier and far more affordable than most people think. A healthy person in their 20s or 30s can typically get a $500,000 to $1,000,000 term policy for $20–$40 a month — about the price of a streaming subscription. Even whole life policies, which build cash value over time, can be surprisingly affordable if purchased early, because premiums are based on age and health. Locking in coverage in your 20s or early 30s can mean lifelong protection at a fraction of what it would cost later.

Unfortunately, time and procrastination are the biggest enemies here. Every year someone says, “I’ll look into it next fall,” and every year they’re older — sometimes with new health conditions that increase costs or reduce eligibility. That’s why those of us further along in life have an opportunity (and maybe a responsibility) to give the younger people in our lives a nudge. Parents, uncles, aunts, older siblings, mentors — this is the moment to say: “You’re making health-plan decisions anyway. Let’s get your life insurance plan set, too.”

Life insurance isn’t something you buy for today — it’s something you buy for the unexpected day you hope never comes. And open enrollment season is the perfect annual reminder to make sure your full protection plan is in place, not just your health plan. A simple, affordable policy can protect a family, secure a future, or at the very least prevent financial hardship at the worst possible moment.

So while you compare deductibles and premiums this season, take one more step: make sure you (and the people you care about) have a life insurance strategy, too. The peace of mind lasts far longer than the paperwork.

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Thing Three

"If you have an apple and I have an apple and we exchange apples then you and I will still each have one apple. But if you have an idea and I have an idea and we exchange these ideas, then each of us will have two ideas." - Charles F. Brannan