The other day, some spooky woman appeared on CNBC and predicted that the stock market is going to crash. Frankly, her charts, graphs, and foreboding appearance got me a little nervous.

But is a crash really imminent?

Honestly, I have no idea.

One thing I do know ...
On Oct. 19, 1987, the market did crash, delivering a sucker punch to the stomachs of investors everywhere -- like my father, who spent the entire day sitting on the couch in a suit, silently staring at the television.

Even seasoned pros on the exchange floors stood around dumbfounded, their arms akimbo and eyes wide with disbelief. Janna Sampson, co-chief investment officer at OakBrook Investments, recently told The Wall Street Journal, "I can remember standing in front of a Quotron machine in a crowd of people and mouths were just hanging open."

That's certainly frightening. But get a load of the very next line of the Journal article: "Most investors today have little if any memory of the crash."

Money heals even the deepest wounds
After all, investors who didn't stampede the exits haven't just recovered their losses -- they've made absolute fortunes. Of the 16 companies that have remained a part of the Dow Jones Industrial Average since "Black Monday" ...

  • All 16 have at least doubled in value.
  • 15 are at least five-baggers.
  • 11 have gained 1,000% or more, turning every $10,000 investment into at least $110,000.

You're probably familiar with some of these 10-baggers:

Dow Component

Gain Since Black Monday

Boeing (NYSE: BA)


Honeywell (NYSE: HON)


McDonald's (NYSE: MCD)


United Technologies (NYSE: UTX)


As of Jan. 3, 2008, with dividends reinvested.

So what?
Sure, that kind of performance could just be a fluke, or some sort of investing anomaly affecting only Dow stocks. But what if the real reason is that great companies' stocks invariably grow over long periods of time, despite dips, dives, and crashes?

I decided to look at the stocks David and Tom Gardner have recommended to their Motley Fool Stock Advisor subscribers. After all, the Gardner brothers are renowned for their belief that the surest way to build wealth over time is to buy and hold great companies.

As expected, the top half of their scorecard sported plenty of winners and big gainers, as well as a smattering of laggards -- causing the skeptic in me to smirk slightly. But by the time I got to the bottom, that smirk had faded. Of the 24 picks they made during their first year (April '02 to April '03):

  • 23 of 24 are (or were sold) in positive territory.
  • Nine have at least tripled in value.
  • Four are up more than 400% -- turning every $10,000 invested into at least $50,000 in five short years.

Talk about a testament to the power of investing over time! And even though none of those 24 is part of the Dow, you'll certainly recognize many of them:


Gain Since Stock Advisor Recommendation

Charles Schwab (Nasdaq: SCHW)


Electronic Arts (Nasdaq: ERTS)



Can it really be that easy to make money?
Well, yes and no. Investing in great companies over the long haul certainly has unparalleled wealth-building power, but finding those great companies is no easy task. Equally as challenging is learning not to let yourself be talked out of the market by some mystic prophesizing doom on cable television.

A trusted resource like David and Tom's Motley Fool Stock Advisor can help you uncover life-changing investments. As for the other part ... well, that's up to you.

I'm going to keep on investing, but if you don't, look me up in 20 years. I'd be curious to know how that works out for you.

In the meantime, I invite you to take a free 30-day trial of Stock Advisor. All you have to do is click here.

This article was first published Oct. 26, 2007. It has been updated.

Fool contributor Austin Edwards is decidedly not a fan of spooky soothsayers, Desperate Housewives, or the Denver Broncos. He does not own shares of any of the companies mentioned., Charles Schwab, and Electronic Arts are Stock Advisor recommendations. The Fool has a disclosure policy.