This table from Bloomberg highlights how U.S. markets have responded to sudden shocks — short, sharp declines of 10% or more that unfolded over just 8 to 20 days. Events like the COVID crash, 2018’s inflation scare, tariff tensions, the Asian financial crisis, and even geopolitical episodes like the Korean War and President Eisenhower’s health scare, are all captured.
Despite the panic in those moments, the S&P 500 has shown remarkable resilience. On average, the numbers look like this:
- 3 months after the shock: +8.2%
- 6 months after: +15%
- 12 months after: +19.7%
That’s almost 20% return in just a year — even if you had invested right at the top before the panic began.
Markets consistently demonstrate this pattern: sharp corrections shake out weak hands, and the recovery begins once uncertainty clears. Investors who stick to their plan and stay the course are often rewarded handsomely. Those who exit in fear usually miss the bounce-back.
What’s your approach during such dips? Do you find yourself anxious and selling, or calmly following your system?
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