Chicken Little was running wild 25 years ago today. But one could hardly blame the poultry for panicking.
On Oct. 19, 1987, the stock market plunged a record-setting 23 percent. The next day, the New York Daily News' front page screamed "Panic!" and a New York Times headline asked: "Does 1987 equal 1929?"
Turns out, the 1987 plunge was a mere stutter step. The Dow Jones industrial average, which closed at 1,739 that day, quickly bounced back. Within a decade, the stock-price average had nearly quintupled.
Financial advisers say the lesson was clear: The stock market rises over time; invest for the long haul.
But millions of small investors are no longer listening to that advice. Yes, it's been a quarter century, with the Dow industrials standing at 13,549 at the start of this silver-anniversary date. But there have been terrifying plunges along the way.
The 2008-09 collapse, in particular, left scars. Between March 2008 and March 2009, the DJIA was cut nearly in half, plunging from 11,740 to 6,547. And don't forget the May 6, 2010, "flash crash" when prices fell straight down — and bounced back — for no apparent reason and all within minutes.
Thursday brought another reminder of the frightful volatility of Wall Street. Shares of Google — knocked down by a surprise release of quarterly earnings — tanked so suddenly that individual investors found themselves losing money before they had a chance to sputter: "What the heck?"
So while the stock market has been moving back up to near where it was before the Great Recession, many people just aren't impressed by experts' stay-the-course advice.
"I'm 69 years old now, and I've been through all of it," said David Wilmot, an attorney in Washington, D.C. He's seen the unexplained drops, the super-high-speed transactions, the insider-trading prosecutions — all of it. And it doesn't look good to him anymore.
^DJI data by YCharts
NOTE: Gray bars indicate recession.