Reminiscent of the 2008 financial crisis, the market has taken a beating in the first three months of 2020. And if the past is any indication of the future, in the long-term, returns on investments should improve. Dow Jones Market Data indicates that after a quarter as rough as this one stock benchmarks show returns of 11.88% and 8.49% in the next two quarters.
The market saw historic drops in the first quarter due to the coronavirus pandemic and some recovery as the CARE Act made its way through all the drama Congress could throw at it, and eventually to President Trump’s desk. However, those gains were not enough to offset the losses and the Dow closed the quarter down 23.2%, which is the sharpest drop in the first quarter ever recorded in the 124-year history of the Dow Jones Industrial Average. It is also the largest quarterly loss since the fourth quarter of 1987.
There was only one Dow stock that gained during the first quarter of 2020. Microsoft closed 2019 at $157.70. On March 31, Microsoft closed at $157.71. This penny was the only gain in the Dow for the first quarter.
The S&P 500 lost 20% in the first quarter of 2020, its steepest decline since 2008. The S&P also closed each of the first three months of the year in red for the first time in over 10 years. During the same time, tech-heavy Nasdaq lost more than 14% which is its worst quarterly decline since the last quarter of 2018.