September 1st – This Day in Stock Market History

Did you know? You can go to any day’s “This Day in History” page by simply entering the month and date after www.begintoinvest.com/

For example: www.begintoinvest.com/May-9

Or follow Begin To Invest on Twitter or Facebook for daily posts!

Prefer video? These are posted daily on our YouTube Channel (and embedded below)

Now, ‘This Day in History’ is also available as an Amazon Alexa Flash Briefing!

Quote of the Day

Unless you can watch your stock holding decline by 50% without becoming panic-stricken, you should not be in the stock market.
– Warren Buffett

This day in 1976 taught that lesson to many investors after a surprise devaluation of the peso. As Ben Graham said: ““have an adequate idea of stock market history, in terms, particularly, of the major fluctuations. With this background he may be in a position to form some worthwhile judgment of the attractiveness or dangers…of the market.”

September 1st – This Day in Stock Market History

September 1st, 1976 – Mexico devalues the peso an astonishing 50% overnight as the country struggles to repay debts with a currency fixed to the U.S. Dollar.

The value of a Peso would go from 8 cents to 4.9 cents overnight and eventually drift even lower. Source: Eyewitness to Wall Street

New York Times' September 2nd, 1976 coverage of Mexico's 1976 Peso devaluation. — New York Times’ September 2nd, 1976 coverage of Mexico’s 1976 Peso devaluation.

New York Times' September 3nd, 1976 coverage of Mexico's 1976 Peso devaluation. — New York Times’ September 3nd, 1976 coverage of Mexico’s 1976 Peso devaluation.

Best September 1st in Dow Jones Industrial Average History

1998 – Up 3.82%, 288.36 points.

Worst September 1st in Dow Jones Industrial Average History

2015 – Down 2.84%, 469.68 points.

Read of the Day

The crisis Mexico faced in 1976 paled in comparison to the crisis it would face in the mid 1990s.

In an age where international investing is now commonplace, its important for investors to have a basic understanding of how these crises can effect them.

Tim Geithner does an great job giving an overview of the peso crisis from his point of view (along with the 2008 U.S. crisis) in his memoir Stress Test

Former Federal Reserve chairman Alan Greenspan also covers the subject in his memoir: The Age of Turbulence

<– Go To Previous Day: August 31st, 1976 – Vanguard launches the first index fund for retail investors.

Go To Next Day: September 2nd, 1998 – Long Term Capital Management sends out letter to investors notifying them of 45% loss last month. –>