What Happens Historically When Markets Correct?

Portfolio Solutions® |

As this chart shows, markets have experienced material corrections every ten years or so since 1926, indicated on the chart in red. These tend to be relatively brief (averaging about 16 months) and shallow (averaging approximately 40% from top to the bottom of the market) but are followed by long periods of positive returns as indicated on the chart in blue. We don’t believe that there is any reliable or consistent way to pick the tops or the bottoms, so we advise our clients to stay invested through these periods so as not to miss out on the gains which historically have always been far greater than the losses.

 

 

 

Not a current client? Click here to schedule a phone consultation to learn more about Portfolio Solutions® and how we can serve you!

All information presented is compiled from sources believed to be reliable and current, but accuracy cannot be guaranteed. This information is distributed for education purposes, and it is not to be construed as an offer, solicitation, recommendation, or endorsement of any particular security, product, or service, nor should it be construed as tax or legal advice. Please click here to see our blog disclosure, which immediately follows the “Applicable Law and Venue” section.