The market continues to experience volatility — something that’s never fun in the moment but is a normal and expected part of investing.
As a bit of a chart geek, I wanted to share some visual perspective that should help you maintain perspective.
The first chart below tells a compelling story. Since World War II, there have been 39 market corrections (defined as a drop of 10% or more). Only 13 of those turned into bear markets (down 20% or more). The rest did not.
This is a helpful reminder - just because the market is down doesn’t mean it’s headed for a crisis. Most of the time, it’s not.
Here are a couple more charts worth seeing:
1. The market is usually below its all-time high.
Since 1950, the S&P 500 has spent 92% of the time not at its all-time high. That might sound discouraging, but it’s actually the price of admission for long-term investors seeking meaningful returns.
2. This recent drop has been quick — but that’s not necessarily bad news.
Ryan pulled together this chart showing the 6 fastest 10% pullbacks in the S&P 500 since 1950. The current one ranks 6th — and in all five prior cases, the market posted positive returns over the following 3, 6, and 12 months.
These kinds of pullbacks are already accounted for in your long-term financial plan. We continue to monitor your plan and portfolio carefully so you can stay focused on your bigger picture, even when the headlines get noisy.
If you have questions or just want to talk through what’s going on, don’t hesitate to reach out.
If you missed our last post on this topic, you can find it here: It's Just Time - Volatility Returns
Happy planning,
Brian