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An 1847 magazine sounds like today
The 1847 outlook
The writer called it a gloomy moment in history. No man then alive had known so much grave and deep apprehension, and the future looked dark and incalculable.
The article went country by country. In France, the political cauldron seethed and bubbled with uncertainty. England and its empire were being tried and exhausted by a social and economic struggle. The United States was beset by racial, industrial, and commercial chaos, drifting no one knew where, and Russia hung over Europe like a storm cloud, dark and silent.
What stocks did anyway
The turmoil has kept coming, and stock returns have been positive despite it. Wars, upheavals, and crises run through history, and charts that lay news headlines over the stock price show all that madness beneath a line that keeps rising. Day to day the market goes up and down. When a recent war began, returns turned a little negative for a while, and then they came back.
What was happening in 1847 to cause such gloom?
The year 1847 fell in the worst stretch of the Irish famine, remembered there as Black '47, when the potato blight struck again. A commercial crisis hit Britain that autumn, with bank failures following the collapse of a railway investment boom. The United States was fighting a war with Mexico, which ran from 1846 to 1848. Within months, revolutions broke out across Europe in 1848, beginning in Sicily and spreading to France, the German states, and the Austrian Empire.
How have stocks fared through wars and crashes?
Elroy Dimson, Paul Marsh, and Mike Staunton, authors of the Global Investment Returns Yearbook, tracked stock returns in dozens of countries from 1900 onward. Their data cover two world wars, the Great Depression, and the inflation of the 1970s. Over that span, world equities returned roughly 5 percent a year after inflation. Some individual markets, including those of Russia and China, wiped out investors for long stretches after revolutions.
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