Why simulate a crash before living through one

The point of this simulator is not to predict the next crisis or to time the market — nobody can do that reliably. It is behavioral preparation: investors who have already seen, in cold numbers, what a −50% does to their portfolio are far less likely to panic-sell when it happens for real. Deciding today, calmly, what you will do when your portfolio is deep in the red is one of the cheapest insurances a passive investor can buy.

If the number you see after the drop makes you feel sick, that is useful information: your asset allocation may be more aggressive than your real risk tolerance, and it is much better to fix that now than in the middle of a crash.

What markets actually did in 2000, 2008 and 2020

These are rough, approximate figures for global/US equities — the exact numbers depend on the index, the currency and whether you count dividends:

• DotCom (2000): a drop of roughly half the market's value, unfolding over about two to three years. Getting back to the previous peak took several more years — one of the longest recoveries on record.
• Lehman (2008): a peak-to-trough fall of over half in around a year and a half. Recovery took on the order of four to six years, faster for investors who kept buying on the way down.
• COVID-19 (2020): about a third of the market's value lost in a few weeks — and recovered within months, the fastest round trip in modern history.

The pattern behind all three, approximately: the deeper and slower the fall, the longer the recovery — but broad, diversified indices have always recovered eventually, while many individual companies never did.

Should I sell if the market drops 40%?

The evidence from passive investing says no: selling after a crash converts a temporary paper loss into a permanent real one, and historically the market's strongest days tend to cluster right after its worst ones — missing them destroys long-term returns. The boring, evidence-backed plan is to hold your positions, keep your monthly contributions running, and rebalance back to your target allocation. This is general education about how broad indices have behaved historically, not financial advice or a personalized recommendation.

Does it make sense to keep contributing during a crash?

Mathematically, yes — and the simulator above shows it. Contributions made during a drawdown buy at depressed prices, so every euro invested then buys more shares. That is exactly why the "with contributions" recovery is months or years shorter than the "without" one. The hard part is not the math but the behavior: automating your monthly contribution is the simplest way to make sure you actually do it when headlines are terrifying.

How long does the stock market take to recover from a crash?

There is no fixed answer: historically it has ranged from a few months (2020) to several years (2000, 2008), and those figures are approximate and index-dependent. What you can control is the variables in this simulator — your contribution rate and your allocation. A portfolio you keep feeding recovers on your schedule, not only on the market's.