Lately, you may have noticed the stock market experiencing more ups and downs than usual. As of March 12, 2025, the S&P 500 has dropped about 6.5% over the past nine trading days, with seven of those days closing lower. While this can feel unsettling, it’s important to keep the bigger picture in mind. Market volatility—those inevitable ups and downs—is a natural part of investing. It’s been around for as long as markets have existed, and history shows us that it’s not something to fear. In fact, staying the course during these times is often the smartest move. Let’s break it down.

Volatility Is Normal—and It’s Why We See Growth

Think of the stock market like a roller coaster. The dips can be scary, but without them, we wouldn’t get the thrilling climbs either. If markets never went down, we wouldn’t have as many chances to see big returns. Over time, markets tend to trend upward. For example, since 1990, the S&P 500 has faced 23 drops of 10% or more—yet it still grew an average of 7.7% per year through 2019. That’s because investors see downturns as opportunities to buy undervalued stocks, pushing the market higher in the long run.

 A Look at History: Big Drops, Bigger Recoveries

Let’s look at some real examples of when the market took a tumble—and how it bounced back:

• 2000-2002 (Dot-com Bubble): The S&P 500 fell about 50% over a couple of years when tech companies crashed. But it recovered and kept growing.
• 2008 (Financial Crisis): The market dropped a huge 57% from its peak. It was rough, but by sticking it out, investors saw new highs within a few years.
• 2020 (COVID Crash): The S&P 500 fell 34% in just weeks. Yet it roared back fast, hitting record levels by the end of the year.
• 2022 (Fed Tightening): The market declined about 25%, but it stabilized and started climbing again.

Here’s the proof it works: If you’d put $100 in the S&P 500 in 2000 and left it there, reinvesting dividends, you’d have about $665 by the end of 2024. That’s a 565% gain—or nearly 8% a year—despite all those wild swings. 

Why Staying Invested Beats Jumping or Cashing Out

When the market drops, it’s tempting to sell and wait for calmer days. But that can backfire. If you sell during a dip, you “lock in your loss”—meaning you lose that money for good unless you buy back in at the perfect moment. And timing the market is tough because the best days often come right after the worst ones. Since 1990, missing just the best day each year would’ve cut your return from 7.7% to 3.9%. Miss the best two days a year, and you’re barely up 1%. Miss the top 20 days, and you’d lose 27% a year! Staying invested keeps you in the game for those big recovery days.

We understand that volatility can also make cash feel like a safe choice, but cash comes with its own risks. Inflation eats away at cash over time, so you’re actually losing buying power. Plus, the market always recovers and hits new highs—cash doesn’t grow like that. Timing when to get out and back in is nearly impossible, and even professionals struggle with it. For example, after the 2008 crash, some people sold and missed the huge gains that followed. Those who stayed invested came out ahead.

If the market’s ups and downs are keeping you up at night, let’s talk. We can revisit your asset allocation—your mix of stocks, bonds, and other investments—to adjust the risk while keeping you in the game for long-term growth.

Tips to Thrive Through the Ups and Downs

Here’s how to stay steady when the market gets bumpy:

• Know Your Plan: Your investment strategy was built for your goals, timeline, and how much risk you’re okay with. It’s designed to weather storms like this.
• Check Your Goals: Are your needs or dreams still the same? If not, let’s tweak your plan. If they are, trust that your strategy is still on track.
• Stick With It: Jumping in and out based on fear can hurt more than help. Your plan is about the long haul, not today’s headlines.

We’re Here to Help You

Market dips like the one we’re seeing now feel big, but they’re small compared to history’s bear markets. Your money is for your future—retirement, a dream home, or whatever matters to you. Short-term noise doesn’t change that. If you’re worried or want to discuss your strategy, please reach out. We’re here to guide you toward long-term success, no matter what the market does today.