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Market swings can feel stressful—and that is totally normal. When the news is full of doom and gloom, it is easy to worry. Whether it is inflation, interest rates, wars, or pandemics, every downturn brings new headlines that make it feel different from the last.

But here’s what hasn’t changed: businesses keep adapting, and the market keeps moving forward over time.

Here are two things to keep in mind during shaky markets:

Volatility Is Part of the Ride

Markets don’t go straight up. Pullbacks are a normal part of long-term investing—even if they’re uncomfortable.

Take a look at the past 50+ years:

  • Since 1968, there have been 9 bear markets (drops of 20% or more). On average, they lasted about 9 months and dropped 34%.
  • But after each of those came a bull market. There were also 9 of those, averaging a 291% gain over 65 months.

So yes, downturns happen—but historically, they don’t last nearly as long as the growth that follows.

A History of Declines (1954-2024)

Even when there are positive market returns over a number of years, there are always periods of declines.

Type of Decline Average Frequency Average Length Last Occurrence
-5% or more About 2 times a year 46 days July 2024
-10% or more About once every 18 months 135 days July 2023
-15% or more About once every 3 years 256 days August 2022
-20% or more About once every 6 years 402 days January 2022

Past results are not a guarantee of future results.
As at 31 December 2024. Sources: Capital Group, RIMES, Standard & Poor‘s. Average frequency assumes 50% recovery of lost value. Average length measures market high to market low.

Trying to Time the Market Usually Backfires

Trying to jump out before things get worse and back in before they get better sounds great in theory. In reality? It’s nearly impossible to get right.

Just missing the 5 best days in the market between 1990 and 2024 could mean ending up with $1.25 million less on a $100,000 investment. Timing mistakes can cost way more than simply riding it out.

That’s why we stick to what works: a solid, long-term plan based on your goals, not the headlines.

What You Can Do During Tough Markets

Even when markets are down, there are smart moves to consider:

  • Make sure your cash reserve covers your short-term needs.
  • Rebalance your portfolio to stay on track (and possibly buy in at lower prices).
  • Harvest tax losses to lower your tax bill.
  • Look at Roth conversions when values are down.
  • Revisit your risk tolerance and goals once things settle.

Market drops never feel good—but they’re also not new. Staying calm and sticking to your plan can make all the difference. If you want to talk things through or make adjustments, we’re always here.

 

Contact Our Team to Get Started

 

The market referenced in this piece is based on the S&P 500 Index. This is not an offer or a solicitation to buy or sell securities, may not be construed as investment advice and does not give investment recommendations. Any opinion included in this report constitutes our judgment as of the date of this report and are subject to change without notice. Additional information, including management fees and expenses, is provided on our Form ADV Part 2 available upon request or at the SEC’s Investment Adviser Public Disclosure website. Past performance is not a guarantee of future results. For more disclosure information, click here.