Keeping your Cool: Facts on Market Downturns
- Wealth8
- Apr 9
- 1 min read
To say global markets have been a little thrown recently would be an understatement!
However this is far from the first time markets have been volatile. So we're presenting you with some facts on market downturns that may help you evaluate your investment decisions with a level head :)
Major indexes, such as the S&P 500, have experienced a significant downturn.
Interest rates, inflation, global news — it’s a lot.
This should certainly worry anyone whose interests lie in the short-term. But as you well know, investing is a marathon, not a sprint.
Historical S&P 500 Data
Assorted Crashes | Drop |
Great Depression (1929) | -86% |
Dot-com Bubble (2000) | -49% |
Global Financial Crisis (2008) | -57% |
COVID-19 Crash (2020) | -34% |
As seen in the chart and on the table, despite crashes of varying severity, the market has always recovered to new highs eventually — It has historically trended upwards.
That said, this is still investing. So even with this historical trend, it is important to bear in mind that past performance cannot guarantee future returns.
In Short:
The market has experienced periods of significant downturn in the past, and recovered.
Even in the present downturn, the average returns of the S&P 500 are higher today than the average closing price in any year prior to 2024.
A long-term approach to investing can help with weathering these short term market fluctuations.
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