Riding Out the Storm: Why Market Volatility Is a Normal Part of Investing

Riding
Out the Storm: Why Market Volatility Is a Normal Part of Investing

If the
recent market headlines have made you a little uneasy, you’re not alone.
Volatility grabs attention—especially when the market dips. But if you’ve been
investing for any length of time, you’ve seen this movie before. The truth is,
market ups and downs are not only expected—they’re a normal and healthy part of
long-term investing.

The
Numbers Behind the Noise

Let’s look
at the data. On average, the S&P 500 experiences a 10% correction once
per year. These pullbacks may feel uncomfortable in the moment, but they’re
historically routine. In fact, since 1928, the U.S. stock market has averaged
one correction of 10% or more every single year.

Even smaller
pullbacks are more common than most realize. Market drops of 5% happen about
three to four times a year on average. It’s not a matter of “if” but
“when”—and being prepared emotionally and financially can make all the
difference.

Why
Volatility Happens

Markets
react to news—earnings reports, interest rate changes, geopolitical tension,
inflation data, and a thousand other headlines. But reacting to short-term
events with long-term money is often a recipe for regret. Remember, volatility
isn’t a sign the market is broken. It’s a sign that it’s functioning as it
always has.

Long-Term
Investors Win the Race

Trying to
time the market—jumping in and out at just the right moments—is nearly
impossible, even for professionals. A study by JPMorgan found that missing
just the 10 best days in the market over a 20-year period could cut your
returns in half. And here’s the kicker—six of the best days often occur
within two weeks of the worst days. If you sell during the downturn, you
likely miss the recovery too.

Perspective
Is Power

From 1980
through 2023, the average annual intra-year decline in the S&P 500 was about
14%, yet the market finished positive in 32 out of those 44 years.
That’s a powerful reminder that short-term turbulence doesn’t dictate long-term
success.

Stay the
Course

If you have
a plan built around your goals and risk tolerance, stick to it. Temporary
volatility should not derail a sound financial strategy. And if you don’t have
a plan or you’ve been losing sleep over recent headlines, it might be time for
a conversation.

If you’re
unsure whether your portfolio is built to handle the ups and downs of the
market, let’s talk. You can schedule a time with me at www.calendly.com/kent-pendleton/60min or call my office. Whether you’re
nearing retirement or just want reassurance, a second opinion never hurts.

Kent Pendleton, AAMS®

Financial Advisor, RJFS

Pendle Hill Advisors LLC

14375 Liberty St, Ste 109 | Montgomery, TX 77356

T 936-297-8267

Kent.Pendleton@raymondjames.com | www.raymondjames.com/pendlehilladvisors

Securities offered through
Raymond James Financial Services, Inc. Member FINRA/SIPC. Investment advisory
services are offered through Raymond James Financial Services Advisors, Inc.
Pendle Hill Advisors is not registered broker dealers and is independent of
Raymond James Financial Services.

Opinions expressed in the attached article are those of the
author/speaker and are not necessarily those of Raymond James. All opinions are
as of this date and are subject to change without notice. Investing involves
risk and you may incur a profit or loss regardless of strategy selected,
including diversification and asset allocation. Prior to making an investment
decision, please consult with your financial advisor about your individual
situation. Every investor’s situation is unique and you should consider your
investment goals, risk tolerance and time horizon before making any investment.
The forgoing is not a recommendation to buy or sell any individual security or
any combination of securities. The information contained in this report does
not purport to be a complete description of the securities, markets, or
developments referred to in this material.

JPMorgan Asset Management. Guide to the Markets – U.S. Data as of
December 31, 2023. Slide titled “Impact of being out of the market.”
https://am.jpmorgan.com/us/en/asset-management/adv/insights/market-insights/guide-to-the-markets/