Why You Shouldn’t Invest: Stock Market Performance Since 1900

There’s a reason you shouldn’t invest in the stock market every year.

In the world of investing, fear is a constant companion. Every year, there’s a fresh crisis screaming from the headlines: wars, recessions, pandemics, bubbles bursting—the list goes on.

These events make you pause, second-guess your portfolio, and think, I shouldn’t invest right now. It’s a siren song of caution, amplified by 24-hour news cycles and social media echo chambers.

Why risk your hard-earned money when the sky is always falling?

Buttttt… despite all those reasons you shouldn’t invest, the stock market has marched on, delivering compound annual growth that has turned modest savings into life-changing wealth for those who stayed the course.

We’re going to look at over a century of data, pairing annual Dow Jones Industrial Average (DJIA) performance (approximate price returns based on historical average closing prices) with the big, scary headlines that made “you shouldn’t invest” the prevailing wisdom of the day.

The lesson? Major events happen, markets dip, but they recover—and often spectacularly—if you simply leave your money alone.

In other words, stop asking if you should pull your money out of the stock market when it starts declining.

We’ll explore a comprehensive table of data from 1900 to 2024, highlighting how the market’s long-term trajectory defies short-term panic.

By the end, you’ll see why the mantra “you shouldn’t invest” is not just wrong—it’s a trap that keeps good people on the sidelines.

The Data: A Century of Crises and Comebacks

To illustrate this, I’ve compiled a table below using historical DJIA average closing prices to calculate annual price returns. I would’ve preferred to use the S&P 500, but since it wasn’t introduced until 1957, it wouldn’t have worked for the timespan I was aiming for.

These are not total returns (which include dividends and would show even stronger growth), but they paint a clear picture: Out of over 100 years, the market posted positive returns in most of them, with an average annual return of roughly 7.5% (excluding dividends) despite the chaos. When including dividends, the total return averages closer to 9.5% to 10%.

Look at the timespan performance in this chart, and then we’ll see why you shouldn’t invest each year.

The “Biggest Reason to Not Invest” column draws from historical events, crises, and prevailing fears that dominated news cycles each year. These aren’t cherry-picked; they’re the real headlines and worries that had investors whispering, you shouldn’t invest—yet time and again, they were dead wrong.

The “DJIA Return (%)” column represents the annual rate of return for the DJIA, excluding dividends.

The “End Value of $100” column is how much you would have at the end of the year if you made a one-time investment of $100 in 1900, and never made another investment.

The “Year” column is… ok, you get it…

Here’s Why You Shouldn’t Invest (And Why You Must)

Look at that table. It’s a rollercoaster: massive drops from 1929-1932 amid the Great Depression, or -34% in 2008 during the financial meltdown. Each time, the headlines blared “you shouldn’t invest”—war is hell, economies collapse, viruses spread.

Yet, scan the columns: for every brutal down year, there are clusters of roaring recoveries. The 1933 67% rebound? High positive percentages in 2009 and on for several years. A decade of double-digit gains.

Why the Market Always Bounces Back (No Matter How Bad It Gets)

The beauty of this data isn’t in cherry-picking winners; it’s in the pattern. Major events—be they world wars, oil shocks, or pandemics—feel existential in the moment. In 1914, World War I shut down the New York Stock Exchange for four months; investors thought you shouldn’t invest ever again. By 1928, the market had quadrupled.

Fast-forward to 2020: COVID-19 wiped out a third of the market’s value in weeks. Lockdowns, death tolls, supply chain Armageddon—you shouldn’t invest, right? Wrong. The DJIA and the S&P roared back before the year even ended, fueled by innovation, stimulus, and human resilience. History shows recoveries average 3-5 years, but the key is patience.

Selling at the bottom locks in losses; holding captures the upside.

Consider the math. A $1,000 investment in 1900, reinvesting through every scary investing moment (using total returns, closer to 10% annualized), would be worth over $15 million today. That’s not luck; it’s compounding. Negative years happen (about 27% of the time), but they’re dwarfed by the positives. The market’s worst 20-year stretch since 1900 still returned +5% annually—beating inflation and bonds handily.

Just look at the $100 column put into a chart:

And those headlines? They’re timeless. Stagflation in 1975? Don’t invest. Dot-com bust in 2000? Don’t even think about it! Even in boom years like 1999, Y2K loomed as the apocalypse du jour. Yet, the market doesn’t care about your news feed; it prices future earnings, innovation, and growth.

Why We Fall for the “You Shouldn’t Invest” Trap

Humans are wired for recency bias—we tend to catastrophize the latest crisis. Behavioral finance calls this the “availability heuristic”: vivid events like 9/11 or 2008 feel like they’ll last forever, prompting us to bail. But data debunks it. Since 1900, the DJIA has survived two world wars, the Great Depression, 9 recessions, and countless scares—delivering positive returns in 75% of calendar years.

The real risk? Missing out. Studies show the average investor underperforms the market by 4-5% annually due to timing attempts. Every time the investing world seems terrifying, you’re tempted to join the herd exiting at lows.

So, Should You Invest? Hell Yes—And Here’s Why Now

Despite every reason you shouldn’t invest over 125 years, the stock market has been the greatest wealth creator in history (I’ll soon compare it to gold and real estate). It recovers from everything because economies adapt, companies innovate, and time heals. Wars end. Bubbles deflate, then inflate anew. Pandemics pass.

The best time to invest was 10 years ago. The second-best time? Right now. Dollar-cost average into a low-fee index fund, ignore the noise, and let compounding do the rest. In a world of endless “don’ts,” the data screams one big “do.”