The Lessons of 'Black Monday'

Two decades ago, on Oct. 19, 1987, the Dow Jones industrial average plunged 508 points. The 22.6 percent decline is still the stock market's biggest one-day loss ever in percentage terms, equal to a 3,200-point drop today. At the time, Americans were dealing with a falling dollar, a new Federal Reserve chairman, and a global war (albeit a "Cold" one) that bred uncertainty. Looked at that way, October 2007 sounds eerily similar to October 1987. So what should today's investor know about "Black Monday," 1987?