Today, the stock market is a main artery of the global financial system, and countries around the world depend on it for economic growth. This is very different from the 1920s and 30s, where stock picking was something old men did in their spare time. It’s a bit of a Contentworks Agency joke that director Niki Nikolaou has been involved in the forex world since dinosaurs roamed the earth. True story. This #ThrowbackThursday we thought we’d take a look at how the forex world has changed through the decades growing bigger, faster and far more integrated than ever before.
1920s: The roaring 20s gave us a lot to be excited about. After all, it was the post-war era and people were happy to be alive. Flappers, rum running and Al Capone are some of the biggest cultural artifacts from this era. The stock markets performed pretty darn well too, with the Dow Jones Industrial Average returning nearly 15% annually over that period. All that changed on October 24, 1929 when the stock market crashed (remember, they told you all about it in Titanic!)
1930s: The fallout from the great crash of ’29 was nothing short of devastating. It kickstarted the Great Recession, which was the preamble to the Second World War. Throughout the decade, the S&P 500 Index stood at a standstill in terms of growth. Suffice it to say, most people were concerned about having enough to eat instead of speculating about their favourite investments. At least we had really good movies such as The Wizard of Oz, Gone with the Wind and King Kong.
1940s: The 1940s were another devastating decade for the global economy. But there was light at the end of the tunnel. By the end of the war, governments were committed to rebuilding a war-torn Europe, and America was well positioned for decades of unprecedented growth. The stock market returned nearly 9% annually over the decade, paving the way for a solid 1950s.
1950s: The post-war baby-boom brought with it massive economic growth for Europe and North America. It was a wonderful time to be alive. Movies were still popular but television really stood out. By the mid-1950s we had Elvis and double-digit stock market growth. What’s not to like? The 50s saw 10-year annualised growth of nearly 20%. For those of us who were wise enough to hold on to our investments, the 50s were a glorious time.
1960s: If you ever watched Mad Men, you’ve no doubt romanticised about the 1960s. It was definitely an interesting era from a cultural perspective, but it wasn’t all positive. The assassinations of JFK and MLK shocked the world, and escalating conflict between West and East gave us a lot to be jittery about. At least we had The Beatles to hang our hat on. For investors, the 60s were another solid decade of growth, but paled in comparison to the post-war boom. We witnessed an average return of nearly 8% during this decade. That’s still plenty to be happy about.
1970s: The 1970s were wonderful for many reasons, with increased political awareness and liberty for women near the top of the list. But ty-dye shirts and disco music were pretty awful now we come to think of it. As the decade continued, hippie culture slowly died out, but the environmental movement began to take shape. Still, for big business, it was a great decade. Large-cap stocks enjoyed double-digit percentage growth during this period. For the broader market, the results were more mixed.
1980s: Who can forget the 1980s? The collapse of the Soviet Union, the fall of the Berlin Wall and the Saved By the Bell Motorola Brick Cell Phone were just some of highlights during the era. Investing during the decade was mostly positive, until Black Monday happened. On October 19, 1987, the market collapsed in dramatic fashion. The Dow lost nearly 23% on this day. The Nasdaq lost about half that because the index’s market system simply failed. Looking back though, Black Monday was a great time to buy at a discount because the 1990s would prove to be something special.
1990s: The roaring 90s gave us everything we ever wanted. From grunge music to cheesy sitcoms through to Hollywood blockbusters, it was the age of consumerism and digitisation. Nothing stoked investor optimism more than the dot-com boom. After all, it was during this time that the Personal Computer became a thing. By 1999, the S&P 500 had averaged a 10-year annualized return of more than 18%. Looking back, ’99 was the year many should have backed out of the market entirely because the events of the next few years would prove fatal for many investors. Although no, Y2K didn’t break the internet. Or our digital alarm clocks.
2000s: Taken as a whole, the 2000s were pretty awful for investors. The decade began with the bursting of the dot-com bubble in 2000 where the market lost a staggering $1.7 trillion. The next few years would prove just as difficult after the 9/11 attacks and proceeding wars in Afghanistan and Iraq. To top it all off, in 2008 the global economy was hit with the worst crisis since the Great Recession. The U.S. stock market returned a paltry 1.1% annually in the 2000s. Small caps performed much better. By the end of the decade, many people had lost all confidence in the economic system.
2010s: The past seven years have been a bit of a whirlwind. Social media has permeated every aspect of our lives, and online trading has become the norm for people looking to access the financial markets. The period has also offered one of the longest and strongest bull markets on record. Just when we thought the bull run was cooling down, Donald Trump became U.S. President. We’ve been in a state of euphoria-mixed-with-fear ever since.
2017: Contentworks Agency was born. Started by a bunch of finance savvy ladies, it aimed its services at floundering FX CMOs and brokers looking to power forward into the next decade through the use of clever content marketing.
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