Stock Pullbacks Are Helpful, Not Hurtful

I have posted this chart below but wanted to do so again as the timing is prudent.

Pullbacks are a normal, healthy part of the investing cycle. Are they unsettling? Very! But when prices turn volatile, I want you to try and think of the market as your favorite retail store. A pullback is just the same as a sale going on at that store, (and in some cases, the sale can be black Friday prices!). People have a hard time viewing the market in this way, but it is tremendously helpful during downturns. 

The second half of February was difficult for investors–and the first part of March was not much better either. There were waves of unsettling news about tariffs, inflation, economic growth, and geopolitical events. 

But was the selling unexpected? Not really. Since 1950, history shows that in post-election years, February has been the worst month for stock prices.

(Spoiler alert: Post-1950, June, August, and September also show poorly in post-election years. So mark your calendar.)

It's important to remember that past performance does not guarantee future results. Stock prices will fluctuate as market conditions change. So, while we can look to history for trends, "the past doesn't repeat, although in some cases it does rhyme"

^{Carson Investment Research, February 5, 2024}