Staying the Course Through Market Volatility
Periods of market volatility can be unsettling, especially for those nearing or already in retirement. After decades of saving and careful planning, watching your portfolio fluctuate can feel like the ground shifting beneath your feet. But market ups and downs are a normal part of investing, and staying invested through those swings is one of the most effective ways to build and preserve long-term wealth.
The historical record is surprisingly reassuring. Over the past century, the U.S. stock market has delivered positive returns about 75% of the time. Additionally, in more than two-thirds of the years following a market decline, stocks bounced back with gains. The most recent example was a 19.8% loss in 2022, followed by a 26.6% gain in 2023. While no one can predict the timing or magnitude of these movements, patterns like this reinforce a key truth: reacting emotionally to short-term declines can do more harm than good.
Distribution of US Market Returns
1926-2024
Source: Dimensional Fund Advisors. Performance is represented by the CRSP 1-10 Index. Indices are not available for direct investment. Their performance does not reflect the expenses associated with the management of an actual portfolio. Return in 1970 was 0.002%. Past performance is no guarantee of future results. Investing risks include loss of principal and fluctuating value. There is no guarantee an investment strategy will be successful. In US dollars. CRSP data provided by the Center for Research in Security Prices, University of Chicago. The CRSP 1–10 Index measures the performance of the total US stock market, which it defines as the aggregate capitalization of all securities listed on the NYSE, AMEX, and NASDAQ exchanges.
Some investors wonder whether it might be possible to avoid downturns altogether by getting out of the market before it drops and re-investing when things improve. It’s tempting to think you could avoid the downturns altogether by trying to time the market. But here’s the problem: timing the market requires being right twice. You need to know when to get out and when to get back in. While this sounds appealing in theory, market timing is rarely successful in practice. Even if you’re lucky once, it’s incredibly hard to be consistently right. And missing just a handful of the market’s best days can have a lasting impact on your returns.
The chart below illustrates the performance of the S&P 500 Index from 1990 to 2024, highlighting the importance of staying invested. Missing just a few of the market’s best days can significantly impact cumulative returns. Staying invested and focused on the long term helps ensure you can capture the returns the market has to offer.
S&P 500 Index Performance
1990-2024
Source: Dimensional Fund Advisors. Indices are not available for direct investment. Their performance does not reflect the expenses associated with the management of an actual portfolio. Past performance is not a guarantee of future results. In US dollars. For illustrative purposes. The missed best day(s) examples assume that the hypothetical portfolio fully divested its holdings at the end of the day before the missed best day(s), held cash for the missed best day(s), and reinvested the entire portfolio in the S&P 500 at the end of the missed best day(s). Annualized returns for the missed best day(s) were calculated by substituting actual returns for the missed best day(s) with zero. S&P data © 2025 S&P Dow Jones Indices LLC, a division of S&P Global. All rights reserved. “One-Month US T- Bills” is the IA SBBI US 30 Day TBill TR USD, provided by Ibbotson Associates via Morningstar Direct. Data is calculated off rounded daily index values.
Instead of trying to predict short-term movements, long-term investors are better served by relying on a disciplined investment strategy that is built around their goals, risk tolerance, and time horizon. A thoughtful financial plan, ideally developed with a trusted advisor, helps you stay focused on your goals, rather than short-term noise. When volatility inevitably strikes, your plan is what helps you stay grounded and confident.
So, the next time headlines make you anxious or your portfolio dips, take a step back. Remind yourself of the big picture. The market’s job is to move. Your job is to stay committed. Because when it comes to retirement planning, consistency—not perfect timing—is what builds lasting financial success.
McLean Asset Management Corporation (MAMC) is a SEC registered investment adviser. The content of this publication reflects the views of McLean Asset Management Corporation (MAMC) and sources deemed by MAMC to be reliable. There are many different interpretations of investment statistics and many different ideas about how to best use them. Past performance is not indicative of future performance. The information provided is for educational purposes only and does not constitute an offer to sell or a solicitation of an offer to buy or sell securities. There are no warranties, expressed or implied, as to accuracy, completeness, or results obtained from any information on this presentation. Indexes are not available for direct investment. All investments involve risk.
The information throughout this presentation, whether stock quotes, charts, articles, or any other statements regarding market or other financial information, is obtained from sources which we, and our suppliers believe to be reliable, but we do not warrant or guarantee the timeliness or accuracy of this information. Neither our information providers nor we shall be liable for any errors or inaccuracies, regardless of cause, or the lack of timeliness of, or for any delay or interruption in the transmission there of to the user. MAMC only transacts business in states where it is properly registered, or excluded or exempted from registration requirements. It does not provide tax, legal, or accounting advice. The information contained in this presentation does not take into account your particular investment objectives, financial situation, or needs, and you should, in considering this material, discuss your individual circumstances with professionals in those areas before making any decisions.
