The COVID-19 stock crash in perspective

There was an interesting graph in today's Globe and Mail Report on Business magazine, which I had to photograph as I couldn't find it online.

 

It shows the performance of the Toronto Stock Exchange (TSX) in the two years or so following the major stock crashes of the last 100 years or so: the COVID-19 Recession (from January 2020), the Great Recession (from August 2008), the Dot-Com Crash (from August 2000), Black Monday (from September 1987), the Double-Dip Recession (from June 1981), the 1970s Oil Crisis (from October 1973), and the Great Depression (from September 1929).

We're accustomed to thinking of the recent COVID-19 crash as being a devastating event financially. Well, as the graph shows, although it has been devastating socially and societally, and although it was one of the sharpest initial downturns of all, it has been anything but devastating in the longer term. The actual downturn (before the TSX returned to the black) only lasted 9 or 10 months, and since then the exchange has been booming. And, except for a few unrelated and relatively minor setbacks, they haven't looked back since. Even with the recent hiccough due to the Russian invasion of Ukraine, the TSX is still about 20% up on pre-COVID levels, and about 45% up from the worst point, in March 2020.

ALL of the other recessions mentioned have been substantially worse after two years, by far the worst being the Great Recession of the early 1930s, followed by the Dot-Com Crash, the 1970s Oil Crisis and the Great Recession of 2008-9. Two years after the Great Depression, stocks were still 70% down (at its worst, the COVID-19 crash only saw a 25% hit, on the TSX at least).

It's good to get a potential perspective.