According to history, sell-offs like the one we’re seeing now are frequently followed by strong recoveries.
“A fall of 15 percent or more [during a five-month period] for the S&P 500 has been followed by positive returns in the following 12 months on all but two occasions over the past 65 years,” according to Benedek Vörös, director of index investment strategy at S&P Dow Jones Indices.
Of course, there’s no assurance these indicators will continue to improve, especially as the Federal Reserve works to reduce economic demand. And, regardless of the statistics, it’s entirely plausible that stocks will continue to plummet.
Overall, however, things appear to be beneficial for investors who are willing to put in the effort.