Par for the Course

What a Monday. Markets have sold off in a hurry. The S&P 500 is down over 8% from recent highs. The tech-heavy Nasdaq is down over 12% in the same period. It's natural for emotions tend to run hot during times like these. I want to provide some context to help you stay informed and maintain your composure through the noise.?

Just a few weeks ago, I shared that this June was the calmest on record. That calm was bound to give way to some turbulence. That calm wasn’t normal, and it wasn’t going to last forever. Market volatility is normal, and apparently, it’s back.

For context, the market experiences a correction almost every year. From 1928-2023 the S&P 500 experienced drawdowns of:

• 5% or worse in 94% of all years.
• 10% or worse in 64% of all years.
• 15% or worse in 40% of all years.
• 20% or worse in 26% of all years.*

Remember:

• A week of market performance does not determine or define the year’s outcome.
• Stocks go way down, even when they go way up.
• Volatility is the price of admission when it comes to investing in the stock market.
• Doing nothing is still doing something.

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This year might conclude with strong gains, or we could see further volatility. The key is that both significant gains and losses are inherent to investing. Volatility is simply part of the journey.

References:

* Ben Carlson, A Wealth of Common Sense 08/04/2024