Recent Market Volatility Have You Concerned?

After a spectacular run of almost 50% from October 2023 to February 2025, the S&P 500 is now off ~9% from its highs.  Although it might not feel like it, this type of decline is actually normal for the stock market.

Investors who have a well-diversified portfolio that includes other asset classes, such as bonds and international stocks, are still doing OK because the other investments are likely up so far this year.  If you have a portfolio that is mostly US large-cap stocks, it is a good reminder that it helps to be diversified.  

It is also helpful to remind everyone not to try to time the market.  Selling now because of a concern about the stock market volatility could lead to missing some of the best days.  In fact, the chart below shows how missing the10 best days over a 20-year period caused the annual return to drop from 10.4% to 6.1%!

As always, setting up a well-diversified portfolio that is aligned with your long-term needs and risk preferences is generally the best approach, once you have made sure that you have an emergency fund in place for short-term needs.  If you are not sure how to set up your portfolio appropriately, please feel free to reach out to us to help with the process.

Remember to stay focused on the long-term and try to avoid the short-term concerns!