The $10K Testwith JJ Free weekly email

Test #7 · Published October 22, 2026

Does the stock market always come back? We tested every crash since 1996

By JJ, host of The $10K Test · · How the tests work

Watch on YouTube · Subscribe to the channel

My verdict: PARTLY TRUE.

The short answer: By the index price, yes: the S&P 500 came back from all four of its 20%+ falls since 1996. But after inflation, $10,000 put in at the March 2000 top took 13 years 2 months to buy what it bought in 2000. And a retiree taking 4% from that top never saw $1,000,000 again.

The key numbers

The claim

Don't worry, the stock market always comes back. People hear it every time the market drops. Newspaper money columnist Marc Cuniberti wrote in March 2025 that in about half a century in the business he has heard "probably thousands of statements by licensed professionals everywhere that the markets always come back". His own column is cautious: he says how long it takes is what matters.

Source: The Union, Marc Cuniberti, March 18, 2025

How we tested it

How long did the stock market take to come back after each crash?

By the index price, every 20%+ fall since 1996 came back. The 2020 crash took about 6 months, 2022 about 2 years, 2007 5 years 6 months, and 2000 7 years 2 months.

Three more falls came close, in 1998, 2018 and 2025, dropping just under 20%. All three were back at a record within 7.1 months. So on the number the news reports, the saying holds.

Does the stock market come back after inflation?

Not as fast. $10,000 put in at the March 24, 2000 top, with dividends reinvested, fell to $5,249 by October 2002 and was back to $10,000 in October 2006. But prices rose 35.6% in those 13 years, so it needed to reach $13,561 just to stand still. In buying power, its low wasn't 2002 but March 2009: $4,145, down 58.6%.

It could buy what it bought in 2000 again only on May 14, 2013, 13 years 2 months after the top. With the dividends spent instead of reinvested, the money was still behind inflation on March 23, 2020: 20 years.

Big tech was worse. The Nasdaq-100 (the QQQ fund, with dividends) fell 83% from its 2000 top. It was back in 14.9 years, and 17.6 years after inflation.

Does your money come back if you're retired and taking withdrawals?

Not always. Retire on March 24, 2000 with $1,000,000, take $40,000 the first year and raise it with inflation. On the day the market (with dividends) got back, October 26, 2006, the account had $633,492. The best it ever did after the crash was $679,046, on July 19, 2007. Then came 2008. The money ran out on August 1, 2025, 25.4 years in, after paying out $1,371,937. The same $1,000,000 left alone is $8,045,010 today.

Per $10,000: taking $400 a year, raised with inflation, paid out $13,719 and then the money was gone. Left alone, it would be $80,450.

The exact top is the worst day to start, by design. So we also started a retiree on the first trading day of every month in 2000, plus the top day: 13 retirees. None ever got their $1,000,000 back in buying power. Only one, the December 2000 start, got back to $1,000,000 in plain dollars, on December 31, 2020.

Why does the market come back but your account doesn't?

Money taken out while prices are down sells more shares for the same dollars, and those shares miss the recovery. The index never withdraws anything, so the market coming back is not the same as your account coming back. Inflation also raises the finish line every year, and raises the retiree's withdrawals with it. And the news reports the price index, without dividends or inflation.

The 2007 top shows the gap. The market, with dividends and after inflation, was whole in 5 years 5 months. The 4% retiree's million was back in plain dollars in 7 years 1 month, and in buying power in 10 years 2 months. After the short crashes of 2020 and 2022, the retiree was back to $1,000,000 in 0.51 and 2.19 years.

What helped retirees in this test?

Taking less. From the 2000 top, the highest withdrawal rate (raised with inflation) whose balance got back to $1,000,000 by October 2026 was 3.4%, or 2.9% to get it back in buying power. From the 2007 top: 6.0% and 5.4%. Nobody knows in advance which top they are retiring into.

Skipping the raise while the account was under $1,000,000. From the 2000 top, that retiree never ran out and has $1,474,274 today. The catch: the withdrawal stayed at $40,000 for 24 years, and today's $43,451 buys what $22,237 bought in March 2000, 44% less.

$10,000 at each record high: how long until it was whole again
Record highFellBack by priceBack after inflation, dividends reinvestedBack after inflation, dividends spent
Mar 24, 2000-49.1%7.18 yrs (May 30, 2007)13.14 yrs (May 14, 2013)20.0 yrs (Mar 24, 2020)
Oct 9, 2007-56.8%5.47 yrs (Mar 28, 2013)5.41 yrs (Mar 8, 2013)6.33 yrs (Feb 6, 2014)
Feb 19, 2020-33.9%0.50 yrs (Aug 18, 2020)0.47 yrs (Aug 10, 2020)3.09 yrs (Mar 23, 2023)
Jan 3, 2022-25.4%2.04 yrs (Jan 19, 2024)2.16 yrs (Mar 1, 2024)3.30 yrs (Apr 24, 2025)

S&P 500 price index and SPY with dividends, closing prices, inflation from BLS CPI. Last column is back for good. The 2000 top first got back by price in 2007, fell under again in 2008, and was back for good in 12.95 years.

The verdict

PARTLY TRUE. By the index price, every 20%+ fall since 1996 came back. After inflation, the 2000 top took 13 years. For money you take out, it may not come back at all: the 4% retiree who started at the 2000 top never saw $1,000,000 again and ran out in August 2025. It works for money that can be left alone for a long time.

What this test leaves out

Data: S&P 500 price (^GSPC), with dividends (SPY), 1996 to Oct 8, 2026; inflation: BLS CPI; no fees, no taxes. Every number on this page comes from the test results.

Questions people ask

Does the stock market always come back?
By the index price it has since 1996: the S&P 500 came back from all four falls of 20% or more. After inflation it was slower: $10,000 put in at the March 2000 top took 13 years 2 months to buy what it bought in 2000.
How long did the stock market take to recover from the 2008 crash?
From the October 9, 2007 record, the S&P 500 price was back in 5.47 years, in March 2013. With dividends reinvested it took 4.85 years, and with dividends after inflation 5.41 years.
How long did the stock market take to recover from the dot-com crash?
By price, 7.18 years, in May 2007, and the 2008 crash then pushed it under again until March 2013. After inflation, $10,000 from the March 2000 top (dividends reinvested) got its buying power back on May 14, 2013.
How long did it take to recover from the COVID crash?
About 6 months. The S&P 500 fell 33.9% in 33 days from its February 19, 2020 record and was back by price on August 18, 2020.
If the market comes back, does a retiree's money come back too?
Not in this test. A retiree with $1,000,000 at the 2000 top, taking 4% raised with inflation, had $633,492 when the market got back in October 2006, never saw $1,000,000 again, and ran out on August 1, 2025.
What withdrawal rate let a retiree from the 2000 top get back to $1 million?
3.4% a year, raised with inflation, got back to $1,000,000 in plain dollars by October 2026. To get it back in buying power, the rate had to be 2.9%.

What's in the video

  1. 0:00 Intro
  2. 0:20 The claim
  3. 1:22 How we tested it
  4. 2:33 The scoreboard
  5. 3:19 The 2000 top, after inflation
  6. 4:58 The retiree
  7. 7:28 Why the retiree loses when the market wins
  8. 8:03 What actually worked
  9. 9:18 The verdict
  10. 9:56 Free weekly email + disclosure
Read the script of the video

The words JJ read on camera for this test. The final video may differ slightly.

If you put $10,000 into the S&P 500 at the very top in March 2000, the market came back. It hit a new record in 2007. But after inflation, your money couldn't buy what it bought in 2000 until May 2013. 13 years. And if you were retired and living on that money, it never came back at all.

I am JJ, and this is the 10K Test. Every week I take a piece of money advice everybody repeats and test it against real market history. Not opinions. What the money actually did.

Today's advice is the one you hear every time the market drops: Don't worry. The stock market always comes back.

You hear it on the evening news, from financial advisors, from your brother-in-law. One newspaper money columnist, Marc Cuniberti, wrote in March 2025 that in about half a century in the business, he'd heard it from licensed professionals "probably thousands" of times.

Sayings repeated thousands of times are exactly what this channel puts to the test, with real market data. Subscribe, and you'll see which ones hold up.

And people believe it for a good reason. For the S&P 500, so far, it's been true. But "comes back" hides three questions. Back to what? After how long? And what about the money you took out along the way? So let's test it.

Here's exactly what we did, so you can check it. We found every time since 1996 that the S&P 500 fell 20% or more from a record high. There were four. The dot-com crash, 2000 to 2002. The financial crisis, 2007 to 2009. The COVID crash in 2020. And 2022. Three more came within a hair, in 1998, 2018 and 2025, falling just under 20%. All three were back within about 7 months.

For each of the big four, we put $10,000 in at the exact top, at the closing price on the record day. Then we asked: when was it whole again? Three ways. One: the price of the index. That's the number on the evening news. Two: with dividends reinvested, using an S&P 500 index fund. Three: after inflation, using the government's own inflation numbers. Could your money buy what it could the day you put it in?

Then we added a retiree: $1 million at the top, taking out 4% a year, raised every year with inflation. That's the famous 4% rule. No fees and no taxes, so this is the best case. One country, one 30-year stretch, through October 2026.

Here's the scoreboard. 2020: the market fell about 34% in 33 days. About 6 months after the top, it was back. 2022: down about 25%. Back in about 2 years. After inflation, 2 years and 2 months. 2007: down about 57%, the worst fall in our data. With dividends, back in 4 years and 10 months. After inflation, 5 years and 5 months. And 2000: down about 49%. Back by price in 7 years and 2 months, in May 2007. With dividends, a bit sooner, 6 years and 7 months.

So on the evening news number, the saying holds. Every drop came back. But look at the last column.

Here's your $10,000 from the March 2000 top, with dividends reinvested. By October 2002, it's down to about 5,250. By late 2006, it's back to 10,000. The market came back.

But prices didn't stand still. After inflation, the bottom wasn't 2002. It was March 2009, after the second crash. Your $10,000 could buy only what about 4,150 bought in 2000. Down about 59%.

It was May 2013 before that money could buy what it bought in 2000. 13 years and 2 months. Prices had gone up about 36%, so your $10,000 had to grow to about 13,560 just to stand still. If you were 65 when you put it in, you were 78.

And if you spent the dividends instead of reinvesting them, like a lot of retirees do, your money was still behind inflation as late as March 2020. 20 years.

Big tech was worse. The Nasdaq-100 fell 83% from its 2000 top, even with dividends. Almost 15 years to come back. 17 and a half after inflation.

Now the good news, because it's real. That $10,000 from the 2000 top is worth about 80,450 today, about 41,000 in 2000 dollars. It came back, and then some. Just a lot later than the saying suggests.

Here's the part that matters most if you're retired. In episode one, we tested Dave Ramsey's 8% rule, and we saw that money you take out during a crash doesn't come back.

March 24, 2000. You retire with $1 million in the S&P 500. You take $40,000 the first year, and a little more each year for inflation. If you'd taken nothing out, your million was back to a million by October 2006. Today it's about $8 million.

But you were living on it. On the day the market got back, your account had about $633,000. The best it ever did after the crash was about 679,000, in July 2007. Then came 2008.

Your million never came back. Not in 2007. Not in 2013. Not ever. The account ran out of money in August 2025, 25 years in, after paying you about $1.37 million.

In $10,000 terms: you take $400 a year. Left alone, your 10,000 would be about 80,000 today. Taking that 400, it paid you about 13,700, and then it was gone.

Now, to be fair, the very top is the worst day to start. In episode one, the retiree who started in January 2000 still has about $260,000. Start 10 days after the top, in April 2000, and about 90,000 is left. So the 4% rule hung on for most of them.

But here's the part that doesn't depend on the day. We started a retiree on the first trading day of every month in 2000, plus the top day itself. 13 retirees. Not one of them ever got their million back in buying power. Only one even got back to a million plain dollars, and that took until December 2020.

The 2007 top is kinder, but look at the gap. The market, with dividends, after inflation, was back in 5 years and 5 months. The retiree's million was back in plain dollars in 7 years and 1 month. In buying power, 10 years and 2 months. Almost twice as long as the market.

And after the quick crashes, 2020 and 2022, the retiree was back within 3 years. Short drops forgive withdrawals. Long ones don't.

Why does the retiree lose when the market wins? When prices are down, every dollar you take out means selling more shares. Those shares are gone. They're not there when the recovery comes. The market comes back. Your shares don't.

And inflation keeps moving the finish line. Every year you need more dollars to buy the same groceries, and your withdrawals go up with it. When people say the market always comes back, they mean the index. The index never spends a dime. You're not the index.

So what does the same data say? One: "comes back" is about time. From the 2000 top, the S&P 500 took about 13 years after inflation. If you'll need the money sooner than that, the saying doesn't cover you.

Two: take less. From the 2000 top, the most a retiree could take, raised with inflation, and still see a million dollars again was 3.4%. To get the million back in buying power: 2.9%. From the 2007 top, it was 6% and 5.4. And nobody knows in advance which top they're retiring into.

Three: skip the raise in bad years. We tested a retiree from the 2000 top who took no inflation raise while the account was under a million. That retiree never ran out, and has about 1.47 million today. The catch: the check stayed at $40,000 for 24 years. Today's 43,000 buys about what 22,000 bought in 2000. That's a real pay cut. But the checks never stopped.

We only tested stocks here. Bonds and cash could change these numbers. That's a future episode.

So: don't worry, the stock market always comes back. Verdict: PARTLY TRUE. For the S&P 500's price: confirmed. Every drop since 1996 came back. But after inflation, the 2000 top took 13 years. And for money you're living on, it may not come back at all. The retiree who started at that top never saw a million dollars again, and ran out of money in 2025.

It works for money you can leave alone for a long time. Not for money you take out. The market comes back. The money you spend doesn't.

Every week I send a free email with the full numbers behind each test, the tables, the charts, and what we're testing next. Free weekly email at 10Ktest.com. And tell me in the comments what money advice you want tested next.

This video is for education and entertainment, not personal financial advice. Your situation is different; talk to a professional before changing how you invest or withdraw your retirement money.

Disclosure: I don't own an S&P 500 index fund. I do own some individual stocks, including Apple, which is part of the S&P 500 and the Nasdaq-100. Nobody paid for this video.

More tests

Every test →  ·  All videos →

Education and entertainment only. Not personal financial advice. Your situation is different; talk to a professional before changing how you invest or withdraw your retirement money. Disclosure: I don't own an S&P 500 index fund. I do own some individual stocks, including Apple, which is part of the S&P 500 and the Nasdaq-100. Nobody paid for this video.