By Allen Giese, CLU®, ChFC®, ChSNC®
Image courtesy of TriStar Pictures.
As I write this, the S&P 500 index is at 6,025. On February 19, 2025, it closed at its all-time high of 6,163. For all intents and purposes, we’re at the same place, and a round trip is all but complete. Because on April 7, it bottomed at 4,835 after falling off the April 2 “Liberation Day” cliff. Even before that day, the index had dropped nearly 10% from its high, in large part because of the long-overdue Magnificent 7 implosion.
During that Liberation Day free fall, we briefly entered bear market territory—a decline of 20%—if only momentarily. As we’ve seen six times already in this century (2000-2002, 2007-2009, 2011, 2018, 2020, and 2022), and if you’ve listened to the financial press, the end of the world was upon us. Financial media reacted with dramatic headlines, amplifying fears and creating an atmosphere of near-panic. Political uncertainty, shifting policies, and concerns over executive powers spilled into the capital markets. Amid the noise, it was easy for investors to get swept up in the prevailing anxiety.
Many investors who sold that day—or any panic-driven day in 2025—and remain in cash now sit at a loss. And there was no shortage of sellers. In fact, U.S. mutual funds and exchange-traded funds (ETFs) saw a net outflow of $46 billion in April.¹ And for all those folks who sold, there were people who bought the stocks and markets that the panic-driven investors sold out of.
It brings to mind the timeless adage: Bear markets are simply periods when stocks return to their rightful owners.
But you didn’t sell. You stayed invested. For that, I applaud your actions (or non-actions, as they were). No, really. I’m standing here, applauding. Think of that scene from the film Rudy when Rudy shows up at that last practice after being beaten down and deprived of his most important dream—but his perseverance and will to succeed refuse to admit defeat. The team, led by the 300-pound (plus) lineman, does the slow clap in his honor. If you haven’t seen Rudy, you have to stop reading this right now and sign in to Amazon Prime or Netflix.
But why didn’t you panic?
Perhaps it was because you understand the big picture? That global capital markets are more than U.S. economic policy changes. Even when uncertainty and constantly changing economic policy from the largest market on the globe reign dominant, capital markets find a way.
Perhaps it’s because you know that once the panic part is over and this event is in the rearview mirror, the further away we get from it, the less important it becomes. In 10 years, I’ll bet most of us will have forgotten the big market event of early 2025. Because it won’t matter to the long-term success of your well-thought-out investment plan.
Perhaps it’s because you know that, whatever the reason the market corrects (and the reason doesn’t matter), this is what markets do. This is what markets have always done, and this is what markets will always continue to do. It’s the reason, over time, that markets reward us so well. Because we’re willing to trade temporary volatility and discomfort for long-term financial security. Yes, it gets uncomfortable at times, and that’s part of the deal. If it doesn’t get uncomfortable, those stocks won’t move to their rightful owners.
Whatever the reason, my admiration comes from a place of knowing that you are going to be all right. That you have what it takes to help ensure your financial security. In the end, your ability to stay the course through uncertainty—whether driven by headlines, politics, or market mechanics—is what sets you apart.
Market turbulence is inevitable, but how we respond is what determines long-term outcomes. You didn’t flinch when it would have been easiest to do so, and because of that, you’ve put yourself in a position not just to recover, but to thrive. Let this experience reinforce what we already know: Resilience, perspective, and patience are the drivers of investment success. The path forward will have its twists, but with your discipline and our continued guidance, your financial future can remain on track.
1. Cash flows out of U.S. mutual funds and ETFs for the month of April (https://www.morningstar.com/business/insights/blog/funds/us-fund-flows).