Keeping A Clear Perspective: Managing Emotions During Market Volatility
It can be very easy to get caught up in the whirlwind of “the now”. I can still distinctly remember being a kid on vacation with my family and being allowed to go parasailing for the first time. I was incredibly excited. When it was time to board the boat and get strapped in, the captain called it off for the day due to a sudden storm building offshore (this was before everyone had a weather forecast accessible in their pocket). Naturally, I was devastated and couldn’t think of anything other than not living that experience. Of course, the following day the skies cleared up and I was able to enjoy an awesome ride 800 feet above the Caribbean waters. Had my teenage self known then what my adult self knows now, I might not have let my emotions ruin the rest of the day, knowing the following day everything was likely to work out.
I know market volatility carries many times more weight in our minds than the transitory mood swings of a teenager. However, I think the corollary of the story remains apt, albeit at a larger scale.
For reference, I’m writing this on the afternoon of April 10th. The market S&P 500 rallied over 9% yesterday, after having fallen almost 15% the preceding week. As I write this, the S&P 500 is down 3%. Needless to say, when you read this, the market may be in a much different spot than when I typed it!
Given the recent volatility, there is little point in attempting to rationalize, either positively or negatively, the trade policy coming from Washington. Decisions are very fluid, and no one knows how discussions are proceeding except for those on the inside. Instead, as we do during most periods of volatility, I’d like to put all of this into perspective.
In no particular order, here are a few things I’ve been thinking about these last few weeks:
- On average, the S&P 500 has a pullback of *10% or more every 1 to 2 years. The last time the S&P 500 had a pullback, prior to the one we experienced last week, was in October 2023. Before that, it was in the first quarter of 2022. Each happened about 18 months apart from one another.
- Back during the Great Financial Crisis of 2008, when Lehman Brothers went bankrupt, many were wondering if the housing market would ever recover. Could the banking system ever regain the public’s trust? Today, the housing market is as strong as ever, and the banks in the U.S. are the strongest in the world.
- Going back to the 1930s, *there have been eleven instances of the S&P 500 falling over 9% over two consecutive days (this happened on April 4-5, 2025). The following are the average returns over various periods and the percentage of times those returns were positive (data collected from @SubuTrade):
During the start of the COVID pandemic, *the S&P fell over 34% in the span of five weeks, from Feb 19 – March 23, 2020. A mere 9 months later, the market was making new all-time highs.- After the retaliatory tariffs were put on hold for 90 days on April 9th, *the S&P 500 rallied 9.5%. This is the ninth largest daily percentage gain ever. The last time the index had an advance of this size was on October 13, 2008, when it gained 11.58%.
Regardless of how you feel about current policy, it’s important to keep these historical anecdotes in mind. We feel that, more often than not, maintaining a broadened perspective during periods of heightened volatility proves to be more beneficial than making impulsive decisions. We continue to keep the long-term in mind and allow for time to reflect when the noise is elevated.
*Data is originated from the historical returns of the S&P 500.
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly.
