Warren Buffett Has Seen His Share of Market Downturns. His Message to Investors: Keep Your Cool.
The stock market has been rather turbulent through the first quarter of 2025, and with the uncertainty surrounding tariffs, interest rates, and recession fears, there's no way to know when that will change. The S&P 500 benchmark index recently dipped into correction territory, and although it is now down by about 9% from recent highs, the Nasdaq Composite and Russell 2000 small-cap index are still down by more than 10%.Let's put things in perspective. As far as stock market corrections go, this has been a rather tame one -- so far, at least.In addition, it's important for investors to realize that corrections are a normal part of investing. Since 1980, the stock market has declined by 10% or more from its recent highs every 1.2 years on average. There were five separate drops of 10% or more in 2020, four in 2022, and one correction in 2023. But there haven't been any market corrections since Fall 2023, so it understandably feels painful to many investors. Continue reading
The stock market has been rather turbulent through the first quarter of 2025, and with the uncertainty surrounding tariffs, interest rates, and recession fears, there's no way to know when that will change. The S&P 500 benchmark index recently dipped into correction territory, and although it is now down by about 9% from recent highs, the Nasdaq Composite and Russell 2000 small-cap index are still down by more than 10%.
Let's put things in perspective. As far as stock market corrections go, this has been a rather tame one -- so far, at least.
In addition, it's important for investors to realize that corrections are a normal part of investing. Since 1980, the stock market has declined by 10% or more from its recent highs every 1.2 years on average. There were five separate drops of 10% or more in 2020, four in 2022, and one correction in 2023. But there haven't been any market corrections since Fall 2023, so it understandably feels painful to many investors.
