Staying on Track

Retirement Investing – Market Volatility

Market volatility is an inevitable part of investing. These bouts of volatility can be unnerving, but they are a normal feature of long-term investing. Retirement investors should expect to see market declines periodically throughout their investing careers.

It is hard not to react when the market is down, especially as the news, headlines, social media, etc. are flashing negative sentiments. While every investor is different, with a unique situation, it is important to consider these fundamental ideas:

Market volatility is not uncommon. To further illustrate the nature of financial markets, the figure below takes a look at intra-year stock market declines from 2000-2019. A decline of at least 10 percent occurred in 11 out of 20 years, or 55 percent of the time. Even with these downturns, stocks rose in most years, with positive returns in all but five years.