TL;DR
The 1987 crash (-22% in a day), the 1998 LTCM panic (-19%), and the 2020 COVID crash (-34%) all recovered within 1-2 years. Buy-and-hold investors who didn't sell experienced minimal long-term damage.
In short
Crashes that recover quickly are the most common kind. Lost decades are the ones that matter for FIRE — 1929, 1966, 2000. The headline crashes that dominate media coverage are usually the less dangerous variety, because they snap back.
We're working on a full deep-dive for this article — including historical data, charts, and worked examples. In the meantime, you can run a free simulation to explore the underlying numbers yourself.
Frequently asked questions
- How do I tell a 'short' crash from a 'long' crash in real time?
- You usually can't. The 1929 crash looked like a normal correction for six months. The 1987 crash looked apocalyptic for a few weeks then recovered. Behavioural discipline beats prediction.
- Should I buy more during crashes?
- If you have spare cash and are still in accumulation, yes — historically that's been the highest-return strategy. If you're already at full allocation, just keep contributing on schedule.
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