Do Downturns Lead to Down Years?
Stock market slides over a few days or months may lead investors to anticipate a down year. But a broad US market index had positive returns in 16 of the past 20 calendar years, despite some notable dips in many of those years. Even in 2020, when there were sharp market declines associated with the coronavirus pandemic, US stocks ended the year with gains of 21%.
Volatility is a normal part of investing. Tumbles may be scary, but they shouldn’t be surprising. A long-term focus can help investors keep perspective.