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Quote of the Day

“Consistently buy an S&P 500 low-cost index fund. I think it’s the thing that makes the most sense practically all of the time…Keep buying it through thick and thin, and especially through thin.”

-Warren Buffett, speaking to CNBC about the S&P 500 index, which debuted on this day 1957.

March 4th – This Day in Stock Market History

March 4th, 1933 – President Roosevelt is inaugurated.

His first week of the presidency was likely the most stressful of any presidents’.

Roosevelt’s team was working with Hoover as his inauguration date approached. Roosevelt urged for a nationwide bank holiday to be enacted, which was put in place the night before.

In response, on this day in 1933 the New York Stock Exchange would not open for trading. It would remain shut, along with the nation’s banks, until March 15th, 1933.

The banking holiday was originally only planned to be 2 days. But it would be extended multiple times:

New York Times coverage on this day in 1933

March 4th, 1957 – The S&P 500 index is introduced. Although Standard and Poors introduced its first stock index in 1923, today marks the anniversary of the S&P 500 index as we know it today.

It closed its first day of trading at 44.06.

The S&P 500 since its creation in 1957:

SP500_chart1957-2018

Since March 4th 1957 the S&P 500 has returned 6,650%, not counting dividends.

Or,  a compounded annual growth rate of just over 7%.

At its origination, the S&P 500 index was made up of 425 industrial companies, 25 railraods, and 50 utilities. At the time, the index represented 90% of the total U.S stock market value.

As of 2020, only about 53 of the original 500 remain. Here’s a few of the notable names that have remained in the index since its founding:

  • 3M
  • Aloca
  • Altria
  • Abbot Labs
  • Royal Dutch Shell
  • Exxon Mobil
  • General Electric
  • Chevron
  • IBM
  • AT&T
  • Dow Chemical
  • Bristol Myers
  • Tootsie Roll Industries
  • Pfizer
  • Coca-Cola
  • Merk
  • Pepsico
  • Colgate-Palmolive
  • Kroger
  • Procter and Gamble
  • Hershey
  • General Mills

There is a pretty good list (though the paper is from 2014, so it is a little dated now) in Appendix B of the paper here.

For an interesting paper on the performance of the original S&P 500 index components over time, check out this paper by Jeremy Siegel and Jeremy Schwartz: The Long Term Returns on the Original S&P 500 firms.

Best March 4th in Dow Jones Industrial Average History

1926 – Up 4.38%, 6.32 points.

Worst March 4th in Dow Jones Industrial Average History

1897 – Down 1.88%, 0.57 points.

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