The S&P/ASX 200 Index (ASX: XJO) is collapsing – down another 7.44% at the time of writing to 4,909 points. We are now officially at the lowest point since 2016 for ASX 200 shares, which was the last time we saw a '4' in front of the ASX 200 index.
It's the worst single day on the ASX since the infamous 'Black Monday' stock market crash of 1987. And just for some context, that was 33 years ago.
There is an ocean of red ink on the ASX boards today, and the ASX banks are at levels not seen since the GFC over a decade ago.
Commonwealth Bank of Australia (ASX: CBA) is holding up the best, but National Australia Bank Ltd (ASX: NAB), Westpac Banking Corp (ASX: WBC) and Australia and New Zealand Banking Group (ASX: ANZ) are all having one of their worst months in history.
Is this Black Friday?
Back in 1987, the stock market plunged 25% in one single day, after the US Dow Jones Industrial Average was down around 22%. It remains the single worst day in the history of the stock markets (both the Dow and the ASX).
Thankfully, as a result, some rules were introduced after Black Monday, such as the suspension of trading if losses exceed 7%.
So no, this isn't as bad as 1987. But there are some worrying fundamental differences. To this day, no one knows what caused the 1987 crash. Various theories put it down to computerised trading issues or a stock exchange malfunction.
But I think everyone knows what is causing today's plunge. The coronavirus pandemic is causing worldwide travel bans, domestic panic and a freezing up of the global economy.
If you hit a stock market that was pushing new record highs every few weeks (despite a compelling economic growth story) with a sledgehammer like that, this is what you end up with.
How should we invest in ASX 200 shares today?
Whatever you do, selling your ASX shares is a terrible idea. The time to sell was a month ago, but today the horse has well and truly bolted. So the best thing to do is consider buying some of your favourite shares for the massive sale they're probably on right now. But if that's a bridge too far today, just sit tight.
The stock market has been through worse than this (just think of the World Wars) and it will come out the other side, like it always does.
