Paige Tyson:

“How should investors think about market volatility? It’s important to remember that volatility does cut both ways. Now, this chart shows the number of days when the market moved more than 1% in either direction. And you’ll notice it’s pretty well balanced. But human nature leads us to really only notice the downside volatility— or, at least, notice it more, because pain is hard to ignore. And it’s not just markets that are falling— it’s your account’s value, it’s what you want that money to do, potentially, for future generations. And we certainly understand how frustrating that can be. But volatility is temporary and can be your friend if you remember that it can also swing to the upside. Volatility is really just the price investors pay for long-term returns, and if you can stay patient and disciplined when times get tough, then you’ll also benefit from the compounding magic of the stock market. I also want to note the upside volatility tends to exceed downside volatility in terms of magnitude. In 2023, for example, markets experienced 22 one-percent-plus up days and only 17 down days. But markets were up over 20% overall, greatly benefiting those who were able to see short-term volatility for what it often is, which is a distraction from getting you to your long-term goals.”