As I’m writing this, the S&P 500 (an index tracking the 500 largest companies in the U.S.) is down about 6.5% from the high reached in late February 2025:
So, to answer the question in the title, I’d say that not much is going on with the stock market right now.
Sure, people are worried about egg prices soaring and particularly distraught about President Trump’s tariffs. And those concerns are valid. No one knows exactly how the market or the economy will react to this new administration’s policies and uncertainty can be a scary thing.
So when the stock market dips like it has over the past couple of weeks, people jump on that narrative because they think it confirms that their fears were right.
However, a 5% to 6% decline in the stock market is not newsworthy at all. The S&P 500 has had at least a 5% drawdown in 94% of all years going back to 1928. In other words, we’re essentially guaranteed to see a 5% downturn almost every year.
On average, the U.S. stock market has experienced:
- A 10%+ decline once every 2 years
- A 20%+ decline once every 7 years
- A 30%+ decline once every 12 years
Markets go down from time to time, and that’s okay. The only reason you can get returns over the long run is because you occasionally experience losses in the short run.
Even with this recent drawdown, the S&P 500 is still up over 12% since this time last year:
Now, if you’ve only been invested in a few individual stocks, this downturn may have been far more painful than this routine 6% drop in the S&P 500.
Meta is down 14% since February 14th.
Amazon is down 17% since February 4th.
Nvidia is down 26% since January 6th.
Palantir is down 35% since February 18th.
Tesla is down 45% since December 17th.
Hims and Hers is down 50% since February 19th.
Bitcoin is down 20% since December 17th.
Picking and choosing individual stocks isn’t easy. While you may be able to catch an upward swing and get a good return, there’s also the possibility of gut-wrenching losses.
This is where the benefit of diversification comes into play. The S&P 500 offers more diversification than owning a few big tech stocks, but if you were to diversify even further into a global portfolio that owns international stocks, instead of a 6% decline you could have somewhere around a 1% positive return on the year so far.
Regardless of where you think the market is headed this year, it’s still crucial that you keep investing your money. Only half of all U.S. households have any type of retirement savings at all:
This is an issue.
Holding onto your hard-earned savings in a checking or savings account isn’t getting you closer to retirement.
A $1,000 stashed away into a bank account in 1980 would still be worth $1,000 today.
That same $1,000 invested in the U.S. stock market in 1980 would have grown to be $165,446 today.
Despite the regular drawdowns and turbulence I mentioned above, the S&P 500 is still up 16,444% over the past 45 years.
Thanks for reading!
Jake Elm, CFP® is a financial advisor at Dentist Advisors. Jake a graduate of Utah Valley University’s nationally ranked Personal Financial Planning program. As a financial advisor at Dentist Advisors, he provides dentists with fiduciary guidance related to investments, debt, savings, taxes, and insurance. Learn more about Jake.</em