From Dimensional Fund Advisors
Stock market slides over a few days or months may lead investors to anticipate a down year. But the U.S. stock market had positive returns, despite some notable dips in many of those years.
Intra-year declines for the index ranged from 3% in 2017 to 49% in 2008. Many years with large intra-year declines saw positive annual returns. In 17 of the last 20 years, U.S. stocks ended up with gains for the year (see Exhibit 1).
EXHIBIT 1
Down but Not Out
Russell 3000 Index returns, with steepest declines within each year, January 2003–December 2022
Volatility is a normal part of investing. Tumbles may be scary, but they shouldn’t be surprising. A long-term focus can help investors keep perspective.