S&P 500 (SNPINDEX: ^GSPC) performance and stock market volatility generally aren't good friends. When volatility picks up, it usually coincides with falling stock prices. Thankfully, investors haven't had to deal with a lot of it in 2026.
The Vanguard S&P 500 ETF (NYSEMKT: VOO) fell by around 9% during the early stages of the Iran war. But beyond that, pullbacks of even 4% have been uncommon. This Rare Signal Is Flashing Again.
In 2009, a "Double Down" signal flashed for a little-known chipmaker called Nvidia. For the first time in years, that same "Total Conviction" signal is flashing for a company 1/100th the size of Nvidia. Continue » That's not the norm, though.
Corrections of 10% to 15% are pretty common and typically occur every one to two years. Even those kinds of pullbacks can feel painful and cause investors to alter their long-term investment plans. That tends to be the wrong thing to do.
A lot of folks end up selling only after stocks have declined and fail to get back in the market until the recovery is already well underway. Disciplined long-term investing suggests that investors need to ride out the volatility. If you choose to keep buying stocks throughout prolonged drawdowns, your personal rate of return might be even better.
Going back to 1980, the S&P 500 has experienced an average intrayear decline of 14%. Reinforcing the buy-and-hold argument, however, the S&P 500 went on to finish the year in positive territory roughly 75% of the time. Market declines are normal.
Extract — continue reading at the source.
