$10K Invested At The Market Peak Before the Great Recession Would Be Worth How Much Now?

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Investing in the stock market makes many people nervous or worried about losing their money.  The Great Recession amplified these feelings.  But if you can get over the emotional side of money, would your money grow faster?

Money drives strong emotional responses from most people. And those emotions run even stronger when losing money comes into the equation.  Most people, myself included, saw their investments (401k and other investments) lose a significant amount of value when the Great Recession hit and the market started tanking.  I had co-workers who stopped contributing to their 401k since they saw it as a losing proposition since every time they looked at their 401k or investment balance it was going down.

It was a hard time to watch your 401k balance or other investments that’s for sure.  But what if you had invested at the market peak before the Great Recession, what would have happened to your portfolio then? It would’ve gone down in value significantly from the market peak (in 2007) before the recession to the lowest point (in 2009) the market hit during the recession.  The bigger question is what would it be worth now that the market has recovered significantly from the depths of the Great Recession.

What goes up must come down

If you’ve invested money in the stock market you have likely felt ups and downs, sometimes those swings can be fairly sizeable from day to day. But for those who started investing in the market just before the Great Recession, you have surely seen what your 401k balance or other investment portfolios look like when they are going down.

So as we start to answer the question of what would’ve happened to your $10k investment at the peak of the market before the recession, we need to dig into some data to help answer the question.  For the data, I pulled information on the stock ticker symbol SPY, which is an Exchange Traded Fund (ETF) that aims to mimic the S&P 500 index. I pulled daily market close prices from Macrotrends.net from the beginning of 2007 all the way until today.  Using closing price data I found that the highest closing price before the recession for SPY was $125.23 per share.

This means that our $10k investment would have purchased 79.85 shares (I am using fractional shares so the investment is an even $10k) at the $125.23 per share price.  Now in hindsight we know that we bought into the market at the peak before the recession, we clearly know that our investment went down in value after that.  Sorting through all the daily close prices I found that the lowest market close price went as low as $56.10 per share on March 9, 2009. OH NO! We would’ve lost over half the value of our initial investment.  Our 79.85 shares that we purchased at $125.23 for $10k would now be worth only $4,479.86.

That would be a painful sight to see in your investment account or 401k balance, but that was the reality for anyone who invested in the market either through a traditional brokerage account or in their 401k.

But then what goes down must come back up?

Looking at the market performance over history we can see that the market will go up and down over time, but in general, has an upward trend in performance. So what if we were able to control our emotions and not exit the market as it kept going down during the Great Recession? As of the close of the market on October 4, 2018, the value per share was $289.44 (see the chart of SPY below).  WOW! That’s an eye-popping number given the low price it fell to during the depths of the recession at $56.10 a share.  Now the value of our original $10k investment would be worth $23,112.58.

That equals out to a compound annual growth rate of 7.9% over the time period of October 9, 2007, until October 4, 2018, an 11 year time period.  That rate of return is a great number for having bought at a market peak before the Great Recession.  Obviously, it would’ve been an even higher return if you had managed to time the market perfectly and bought shares at the bottom in March of 2009.  But it also goes to show that the power of “buy and hold” works as long as you have nerves of steel and don’t sell as the market declines.

Now imagine if you stick with a strategy of buying into the market regularly over time.  This would give you the benefit of dollar cost averaging, which means that when you buy shares over different time periods you would own shares purchased at both the highs and lows of the market.  This is effectively what happens when you regularly invest in your 401k but is also what happens when you use an investing app like Acorns and invest your spare change or other designated amount on a regular basis.


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Hi, I'm GP. A personal finance expert with a mission to help Entirely Money readers break free of money worries. Combining a finance-focused education background (B.S. in Finance and MBA with Finance focus) with over 15 years of personal and corporate finance experience to help you achieve your financial best life!