Market volatility can stir up unease, but we want to share a perspective that underscores the value of staying committed to your long-term financial strategy. History offers a powerful insight: since 1987, after market drawdowns of 15% or more, the average 12-month forward return has been an impressive 41% (see chart below). This isn’t just a statistic—it’s a reminder that tough moments often lay the groundwork for significant opportunities. Let’s explore why sticking to your diversified, long-term plan may likely be the smartest path forward.
Here are the key reasons to stay the course:
Drawdowns Precede Strong Returns: That 41% average recovery after a 15%+ dip shows markets tend to bounce back. Patience could position you to capture those gains.
Diversification Can Reduce Risk: Your portfolio likely spans stocks, bonds, cash, and more, balancing losses in one area with stability or growth in others.
Avoid Emotional Decisions with Long-Term Assets: Selling during a downturn or chasing trends can derail progress. A steady approach keeps you on track.
Volatility Is Normal: Markets fluctuate—it’s part of the cycle. Your customized, goals-based plan is built to handle these swings while aiming for long-term growth.
Your investment strategy was designed with resilience in mind. Diversification acts like a shock absorber, softening the impact of market dips while keeping you ready for recoveries (2). Trying to time the market is a gamble that often backfires—missing just a few of the best days can slash returns. Instead, we focus on consistency.
Picture your investments like tending a Nebraska field through the seasons. You’ve got planting in spring, growth in summer, and harvests in fall—but winter’s chill always comes. If you dig up your crops at the first frost, you’ll miss the next season’s bounty. Staying diversified and patient keeps your fields strong, ready to yield big when the sun returns (2). The data backs this up: markets reward those who stay invested through cycles (2).
Let’s keep our eyes on the horizon. By holding firm to your diversified, long-term plan, you’re not just navigating today’s uncertainty—you’re setting yourself up to seize tomorrow’s growth (2). We're here to answer any questions or discuss how we can keep your portfolio aligned with your goals.
(2) Although diversification or asset allocation is not a guarantee against loss, it can be an effective strategy to help manage investment risk.
The S&P 500 Index is a capitalization-weighted index designed to measure performance of the broad domestic economy through changes in the aggregate market value of 500 stocks representing all major industries.