Faith, Patience and Discipline
October 2026
Last month the country marked twenty-five years since September 11, 2001. Most of us can still name the room we were standing in when the news came. Few days in American life have been burned in that deeply.
What people tend to forget is that the attacks did not land on a calm market. They landed in the middle of a long, grinding collapse. To understand what 9/11 meant for investors, you have to see the whole stretch around it.
The 929 Days
From March 24, 2000 to October 9, 2002, the S&P 500 fell 49%. The decline lasted 929 days. At the time it was the worst drop since the early 1930s, and it remains the longest since 1950. The Nasdaq, where the dot-com enthusiasm had been most concentrated, lost roughly 80%.
The blows kept coming. The technology bubble burst. The economy slipped into recession in March 2001. Then came the attacks. About ten weeks later, Enron, which had recently ranked among the ten largest companies in the country, collapsed in bankruptcy and fraud. Arthur Andersen, one of the great accounting firms, failed the following June. WorldCom and Tyco came apart soon after. By the fall of 2002, many investors doubted whether any company's reported earnings could be believed.
The New York Stock Exchange stayed closed for the rest of that September week. When trading resumed on Monday the 17th, the market fell five days in a row. The S&P 500 closed that Friday at 966.
Had you gathered a room of intelligent, informed people that weekend and asked them what the next twenty-five years held, I doubt many would have said the best stretch of their financial lives. Yet that is what it turned out to be for the patient owner.
What Happened Instead
As I write, the S&P 500 sits near 7,600. That is close to eight times its level on that Friday in September 2001. And the path was not smooth. Midway through, the Global Financial Crisis cut the index by 58%.
Nor have we run out of reasons to worry. Inflation is back on the front page. Interest rates are higher. Wars continue with no clear end, and the national debt is approaching $40 trillion. So why is the market up roughly eightfold in the face of all that?
The answer is simple. The companies in the index now earn close to nine times what they earned then. Over long periods, stock prices follow earnings. Not headlines. Not elections. Not the Fed. Earnings. The noise gets our attention. The earnings do the work.
The Paycheck That Grew
This is the part I most want clients to see. In 2001, the S&P 500 paid a dividend of just under $16. For this year, it is on pace to finish a little above $80. That is roughly five times the income. Over the same period, the Consumer Price Index went from about 177 to about 340. Living costs roughly doubled.
Put those two facts side by side. The income from owning American businesses grew about two and a half times faster than the cost of living. And that is before counting any growth in the value of the shares themselves.
Now consider the lender. Someone who bought a long-term bond in 2001 received the same interest payment every single year. At maturity, the original dollars came back. The promise was kept in full. But those dollars bought about half of what they bought on the day the bond was purchased. The contract was honored. The purchasing power was not.
That is the difference between owning and lending. The lender is promised a fixed number of dollars. The owner shares in whatever the business earns, and good businesses tend to earn more over time. Across one lifetime, the gap is large. Across a family, from parents to children to grandchildren, it often decides whether wealth grows or quietly erodes.
Distance Brings Clarity
Up close, the fall of 2001 looked like the end of something. From twenty-five years away, it looks like one of the great opportunities of a generation, available only to people willing to sit still through a great deal of fear.
That is the strange truth about investing. The closer you stand to the market, the less you can see. Daily prices are mostly emotion. Decades are mostly earnings. Step back far enough and the picture comes into focus.
The investors who did best over this stretch were not the ones who saw it coming. Almost no one did. They were the ones who kept owning, kept collecting their growing dividends, and did not sell in the worst week anyone could remember.
There will be another hard stretch. There always is. When it comes, it is worth remembering September 2001, and what patience paid the owners who stayed in their seats. The tortoise wins the race every time.
Clients of NW Advisory received a short note ahead of this post about what it means for their own plans. If you would like to have that conversation about yours, I'm always glad to.
Sources: S&P 500 levels and dividends from Standard & Poor's and Yahoo Finance. S&P 500 earnings history from NYU Stern. Estimated full-year 2026 earnings and dividends from FactSet. Consumer Price Index data from the Federal Reserve Bank of St. Louis (FRED).
Past performance does not guarantee future results. Index figures are shown for illustration only; it is not possible to invest directly in an index. Full-year 2026 earnings and dividend figures are third-party estimates from FactSet, not a forecast by NW Advisory, LLC. This article is for educational purposes and is not individualized investment advice.