Do Downturns Lead to Down Years?


Stock market slides over a few days or months may lead investors to anticipate a down year. But a broad US market index had positive returns in 16 of the past 20 calendar years, despite some notable dips in many of those years. Even in 2020, when there were sharp market declines associated with the coronavirus pandemic, US stocks ended the year with gains of 21%.

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.


Disclosures

Dimensional Fund Advisors LP is an investment advisor registered with the Securities and Exchange Commission.

Past performance is no guarantee of future results. Indices are not available for direct investment. Their performance does not reflect the expenses associated with the management of an actual portfolio.

Investing risks include loss of principal and fluctuating value. There is no guarantee an investment strategy will be successful.