Market Volatility
Keep a Long-Term Perspective
Not every financial account that goes down in value stays down. In fact, history shows that financial markets eventually recover with time.* Rather than making drastic moves at the first sign of trouble, here’s some practical wisdom designed to help you recover well in the wake of challenging downturns.
Stay invested for the long haul
The chart below shows two decades’ worth of stock and bond market performance. While markets saw some alarming dips, they also rallied periodically for strong gains and ultimately moved forward in an upward trajectory. We also see a potential benefit of diversification** at work. The green line, which represents a portfolio composed of both stocks and bonds, generated higher returns than an all-bond or all-cash portfolio with less volatility than an all-stock portfolio.
GROWTH OF A HYPOTHETICAL $10,000 INVESTMENT OVER TIME
As of December 31, 2024
Sources: TRPI, created with Zephyr StyleADVISOR; S&P; Bloomberg Index Services Ltd.; and FTSE. See Additional Disclosures.
*Past performance cannot guarantee future results. It is not possible to invest directly in an index. Chart is shown for illustrative purposes only. Stocks: S&P 500 Index, Bonds: Bloomberg U.S. Aggregate Bond Index, and Cash: FTSE 3-Month U.S. Treasury Bill Index. As of December 31, 2024.
“Bloomberg®” and Bloomberg Indices are service marks of Bloomberg Finance L.P. and its affiliates, including Bloomberg Index Services Limited (“BISL”), the administrator of the index (collectively, “Bloomberg”) and have been licensed for use for certain purposes by TRPI. Bloomberg is not affiliated with TRPI, and Bloomberg does not approve, endorse, review, or recommend this product. Bloomberg does not guarantee the timeliness, accurateness, or completeness of any data or information relating to this product.
Over a 20-year period, stocks and bonds have each experienced their own periods of dips and rallies—though, ultimately, they've continued on an upward trajectory over time.
Remember, long-term investment goals require long-term perspective, particularly during periods of heightened market volatility. While it's hard to watch your portfolio fluctuate with the ups and downs of the market, sticking with your long-term strategy may pay off over time.
Additional Disclosures
S&P — The “S&P 500 Index” is a product of S&P Dow Jones Indices L L C, a division of S&P Global, or its affiliates (S P D J I), and has been licensed for use by TRPI. Standard & Poor’s Registered and S&P Registered are registered trademarks of Standard & Poor’s Financial Services L L C, a division of S&P Global (S&P); Dow Jones Registered is a registered trademark of Dow Jones Trademark Holdings L L C (Dow Jones). TRPI’s product is not sponsored, endorsed, sold, or promoted by S P D J I, Dow Jones, S&P, or their respective affiliates, and none of such parties make any representation regarding the advisability of investing in such product, nor do they have any liability for any errors, omissions, or interruptions of the “S&P 500 Index.”
F T S E — Source: London Stock Exchange Group P L C and its group undertakings (collectively, the “L S E Group”). Copyright L S E Group 2024. F T S E Russell is a trading name of certain of the L S E Group companies. “F T S E Registered” is a trademark of the relevant L S E Group companies and is used by any other L S E Group company under license.
All rights in the F T S E Russell indexes or data vest in the relevant L S E Group company that owns the index or the data. Neither L S E Group nor its licensors accept any liability for any errors or omissions in the indexes or data, and no party may rely on any indexes or data contained in this communication. No further distribution of data from the L S E Group is permitted without the relevant L S E Group company’s express written consent. The L S E Group does not promote, sponsor, or endorse the content of this communication.
Important Information
This material is provided for informational purposes only and is not intended to be investment advice or a recommendation to take any particular investment action.
This information is not intended to reflect a current or past recommendation concerning investments, investment strategies, or account types, advice of any kind, or a solicitation of an offer to buy or sell any securities or investment services. The opinions and commentary provided do not take into account the investment objectives or financial situation of any particular investor or class of investor. Please consider your own circumstances before making an investment decision.
**Diversification cannot assure a profit or protect against loss in a declining market.
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