Over the past few weeks, you’ve likely noticed increased turbulence in the stock market. In our opinion, this volatility stems from several key factors.
First, uncertainty around U.S. fiscal policy—particularly tariff threats and rising government debt—has unsettled markets.
Second, the Federal Reserve’s cautious stance on rate cuts, with inflation still above the 2% target, has tempered expectations for aggressive monetary easing.
Finally, mixed economic signals, like softening GDP growth forecasts and uneven tech sector earnings, have fueled short-term jitters.
These dynamics, amplified by global trade tensions and geopolitical noise, have led to sharp swings in indices like the S&P 500.
Despite this choppiness, research below shows that in order to obtain the great return potential of stocks, one must stay invested through the volatility. Annual corrections of 14% (on average) still lead to positive yearly returns about 75% of the time (Source: FactSet, Standard & Poor’s, J.P. Morgan Asset Management). This includes a 10% drop in 2023 and an 8% drop last year, yet markets ended higher (Source: FactSet, Standard & Poor’s, J.P. Morgan Asset Management). Staying the course through choppy markets is key.
Source: FactSet, Standard & Poor’s, J.P. Morgan Asset Management.
Returns are based on price index only and do not include dividends. Intra-year drops refers to the largest market drops from a peak to a trough during the year. For illustrative purposes only. Returns shown are calendar year returns from 1980 to 2024, over which time period the average annual return was 10.6%.
Guide to the Markets – U.S. Data are as of February 28, 2025.
Additionally, research shows us that if one sits out and misses just 10 of the best days in the market, returns are severely hampered and can have a lasting impact on retirement goals.
Volatility is a feature, not a flaw, of investing. The goal of our diversified portfolios is to weather these storms, balancing growth opportunities with risk management. The research above shows that panic-selling risks locking in losses and missing the rebound. By sticking to your long-term plan, you’re positioned to potentially capture gains as markets stabilize. Let’s discuss any concerns—we are here to guide you through this.
The material presented includes information and opinions provided by a party not related to Thrivent Advisor Network. It has been obtained from sources deemed reliable; but no independent verification has been made, nor is its accuracy or completeness guaranteed. The opinions expressed may not necessarily represent those of Thrivent Advisor Network or its affiliates. They are provided solely for information purposes and are not to be construed as solicitations or offers to buy or sell any products, securities, or services. They also do not include all fees or expenses that may be incurred by investing in specific products. Past performance is no guarantee of future results. Investments will fluctuate and when redeemed may be worth more or less than when originally invested. You cannot invest directly in an index. The opinions expressed are subject to change as subsequent conditions vary. Thrivent Advisor Network and its affiliates accept no liability for loss or damage of any kind arising from the use of this information.
Index Benchmarks presented within this report may not reflect factors relevant for your portfolio or your unique risks, goals or investment objectives. Past performance of an index is not an indication or guarantee of future results. It is not possible to invest directly in an index.
The S&P 500® Index, or the Standard & Poor's 500® Index, is a market-capitalization-weighted index of the 500 largest U.S. publicly traded companies.
Gross domestic product (GDP) is the total monetary or market value of all the finished goods and services produced within a country’s borders in a specific time period. As a broad measure of overall domestic production, it functions as a comprehensive scorecard of a given country’s economic health.