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S&P 500 Intra-Year Drops

S&P 500 Intra-Year Drops

February 07, 2023

If you turn on the news, you will hear headlines like “The looming debt ceiling crisis is pressuring the market”, “A recession in America looks likely”, and “S&P 500 falls as higher rates rattle investors”. Is this increased volatility unique to 2022 and 2023 or have we seen this before?

The fact of the matter is corrections happen regularly and are to be expected when investing. The economy and the markets go through peaks and troughs or good years and bad years. To help illustrate that concept please look at this graphic:

This shows the S&P 500 since 1993, how low it went intra-year (represented by the blue dot) and what it finished off as (represented by the red bar graph). In 18 of the last 29 years or about 62% of the time markets have dropped 10% or more. But of those 18 years, the market ended with a positive return 10 of those times. This is over 50% of the time! This really highlights the importance of keeping course in times of volatility.

We understand that it does not feel good seeing your account balances decrease but know that we have a plan in place within your portfolio and the best course of action is perseverance. As famous financial author Nick Murray states: “Investing is the age-old, never-ending emotional battle between fear of the future and faith in the future”. History has rewarded those who remain invested in times of volatility and have faith in the future. We hope this history helps build a little more faith in the future and brings some comfort in these crazy times!