1987 Black Monday Anniversary - A reminder of risk
Thirty Years Since Crash of 1987 a Reminder of Risk
Thirty years ago, on October 19, 1987, the Dow Jones Industrial Average (DJIA) fell 22.61 percent -- the largest one-day decline in history. The stock market crash that began October 28, 1929, Black Monday, was a one-day 13 percent decline and fell another 12 percent the next day. It’s considered the biggest stock market crash in history. There have been other dark days, but they were much smaller on a percentage basis. Bad things can happen to your investments, very suddenly and very dramatically. While there are some exceptions, the big declines in the market took almost everyone by surprise.
But good things can happen as well. Since that day in 1987, the market has rebounded. Millions of Americans have seen their investments in securities grow, providing the basis for secure retirements, charitable giving and sometimes a head start for the next generation. Investing in securities has risk, and the potential for rewards as well.
Because of lower interest rates, many investors – especially retirees – have tried to replace the income they previously received from CDs and other savings accounts. Many have done so by taking greater risk. Some investments have included Trust Preferred Securities, Preferred Securities, Index-based investment products and Business Development Companies (BDCs). Many of these types of investments have been placed in retirement accounts, like IRAs and 401Ks. They all carry risks, and many have performed well. The future, though, is uncertain.
The risks are there, but they are not always easy to see. Investors need to know that their investments have risk. We seek to educate investors, not frighten them. History sometimes repeats itself, and investors would be wise to seek advice from a registered person affiliated with a registered organization about how to manage their risks. Of course, we are not offering investment advice, but rather alerting you to the uncertainties that exist.
The Secretary of State’s Securities Division can help Missouri investors perform their due diligence to ensure that, on a personal level, they have minimized the risk of fraud that can be found in illegitimate investments. As evidenced by the actions taken against advisers who commit fraud, there is no limit to the creativity that they can use to put your money in their pockets.
The Securities Division can provide information about investment firms and individuals to help you become better educated about them and your investments. We are available by phone at 800-721-7996 or online at www.missouriprotectsinvestors.com. On our website, you’ll find links to videos, how to check on your adviser, how to file a complaint, in-depth educational materials on how to identify risk and special advisories on risky schemes like binary options.
It’s smart to invest for a lifetime. Let us help you know your risks.