Market Volatility Is Normal

By Hayden Bankes, Financial Advisor

On January 28, 2026, The S&P 500 climbed as high as 6,978 before dropping to 6,343.72 on March 30. That represents a 9.1 percent swing in just over two months. It feels like a lot when you are watching it happen, but this kind of movement is simply part of being invested in the stock market.

If you look at market history going back to 1980, pullbacks during the year are completely normal. In fact, years without any meaningful dips are rare. The red dots on the chart below show the biggest decline each year, while the gray bars show where the S&P 500 ended the year. The main takeaway is that what feels scary and unusual right now is usually just normal market behavior.

Take 1987, for example. That was the year of Black Monday. The S&P 500 dropped as much as 34 percent at one point, yet it still finished the year in positive territory. At the time, it felt like the world was falling apart, especially with that huge one-day crash. But the market found its footing and ended the year in the green.

In 2001, after the terrible events of 9/11, the market fell about 30 percent from its high and closed the year down. The attacks created immense fear and uncertainty, especially for airlines, travel, and insurance companies. It felt like nothing quite like it had ever happened before.

Then there was 2020. During the COVID-19 pandemic, the market plunged 34 percent in just a few weeks, but by the end of the year, it was up more than 16 percent. The shutdowns and widespread worry made everything feel completely new and overwhelming. Yet the market followed the same pattern we have seen so many times before: a sharp drop, followed by a recovery.

More recently, in 2025, new tariff news and policy uncertainty caused the market to fall nearly 19 percent before it bounced back and finished the year positive. Even when the reasons feel fresh and unpredictable, the market has shown time and again that it can recover.

Here is something encouraging to keep in mind: since 1980, the S&P 500 has finished the year in positive territory in roughly 35 out of 46 years. That is a strong track record, even with all the bumps, scares, and significant drops along the way.

Here is the real point: every market cycle makes investors think this time is different. The headlines seem bigger, the risks feel brand new, and the downturn always feels unprecedented while you are living through it. But history keeps teaching the same lesson—uncertainty is not new. It is one of the most constant parts of investing.

The stock market has been through crashes, wars, terrorist attacks, pandemics, political drama, inflation scares, and major policy changes. The cause of volatility may always feel unique, but the way the market behaves is surprisingly familiar.

Short-term uncertainty is normal. What feels emotionally overwhelming is often just the usual ups and downs when you zoom out. Volatility is simply the price we pay for the long-term growth that stocks have delivered overtime.

So, what can you actually do when the market gets bumpy? One of the best ways to limit how much volatility affects your portfolio is to stay diversified. That means spreading your investments across different stocks, sectors, and especially other asset classes like bonds. Bonds tend to move differently than stocks and can help cushion the blow during market downturns. It is also important to make sure you are holding the right mix of investments that match your age, goals, and comfort with risk. A well-balanced portfolio will not stop the market from swinging, but it can make those swings much easier to live with and help you stay invested for the long haul.